PACIFIC FINANCIAL TECHNICAL ASSISTANCE CENTRE
ANNUAL REPORT 2016
PFTAC Annual Report 2016
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STATEMENT BY THE CHAIRMAN OF THE PFTAC STEERING COMMITTEE
The 2016 PFTAC Annual Report and Steering Committee meeting will be the last before the start of the
Phase V program, running from late this year through April 2022.
PFTAC is an important resource for finance ministries, central banks, financial supervisors, tax authorities,
and statistical offices right across the Pacific. We have all benefited from the technical assistance and
training provided by PFTAC over the past 23 years. And we are well aware that none of this would have
been possible without the financial support and cooperation of PFTAC’s donors and the IMF. For this we
are all grateful.
The Steering Committee will have important issues to cover this year. In addition to providing feedback on
PFTAC’s performance in FY2016 and the draft work program for FY2017, we will have the opportunity to
provide input to the design of the PFTAC program over the next 5 ½ years in Phase V. It is important that
we make the most of this opportunity to ensure that PFTAC continues to meet the region’s needs for
capacity development in key areas of macroeconomic and financial management. We will also have to
decide how much we as members are willing to contribute to funding PFTAC’s work, and how we want to
run the Steering Committee. Decisions on these matters will affect PFTAC and the work that it does for us
for years to come. So we need to come to the meeting well-prepared to make good decisions and give
good strategic guidance.
Lastly, I would like to thank the Government of Samoa for their generosity in hosting this meeting. I hope
that we shall all take advantage of the occasion to enjoy Samoa’s beauty and hospitality.
Vinaka vakalevu
Barry Whiteside, Governor of the Reserve Bank of Fiji.
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FOREWORD BY THE CENTRE COORDINATOR
The 2016 fiscal year (May 2015 to April 2016) has been a busy but successful year for PFTAC. Several of
the initiatives begun in the past few years appear to be maturing well and yielding desired outcomes.
There are examples in all areas of our work, but let me point to just a few. In the tax area, the increased
focus on strengthening core processes appears to be delivering good results in several jurisdictions. In
financial supervision, the on-site examination program is well-underway, with seven inspections
completed this year, and the credit union program is leading to updates in legislation and enhanced
supervision in several countries. In macroeconomics, strengthened policy analysis and forecasting
frameworks are being integrated into budget processes in Cook Islands and Tonga. And cutting across
sectors, successful workshops have been held on expenditure and revenue forecasting, in collaboration
with UNESCAP, and following up on the Workshop on Strengthening Fiscal Frameworks in the Pacific
Islands, held in Nadi in June.
It is pleasing to see real progress being made in many countries and areas of macroeconomic
management, and we are glad that PFTAC has been able to contribute. But we are also well aware that
successes are generally the product of good cooperation among the countries involved and close
collaboration with our development partners. Of these, the countries implementing the reforms are the
most important. Without their determination and sustained support, at both the technical and political
levels, little would be achieved.
Without the ongoing financial support of our donors, PFTAC would simply not be in business. We are well
aware that development budgets are under pressure in most donor countries, and that it is important to
be able to show value for money to taxpayers. We hope that the achievements in the region can justify
continued support for PFTAC’s work in the Pacific.
In the coming year, PFTAC will see a lot of change. In our work program we will make a full transition to
the Phase V program. Although we have already been making moves in this direction, it promises to be an
exciting time. In the next year we will also have significant personnel changes, with the possible addition
of new advisors, and turnover in current staff at PFTAC, including me. It has been a very rewarding
experience for all of us.
Lastly, I would like to thank the Government of Samoa for hosting the 2016 Steering Committee meeting,
and look forward to seeing our members and development partners there.
Scott Roger, PFTAC Centre Coordinator
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CONTENTS1 PAGE
Statement by the Chairman of the PFTAC Steering Committee ......................................................... i
Foreword by the Centre Coordinator ................................................................................................ ii
Acronyms ...................................................................................................................................... iv
I. Overview of the Pacific Financial Technical Assistance Centre ...................................................... 1
A. Institutional Framework ............................................................................................................ 1
B. Capacity Development Strategy ................................................................................................ 2
C. CD Management and Implementation ...................................................................................... 3
II. Review of FY2016 (May 2015-April 2016) ...................................................................................... 7
A. Overview .................................................................................................................................... 7
B. PFTAC Spending and Financing in FY2016 ............................................................................... 10
C. Sectoral Achievements in FY2016 ............................................................................................ 13
III. Objectives and Work Plan for FY2017 ......................................................................................... 34
A. Overview .................................................................................................................................. 34
B. Work Program and Budget ...................................................................................................... 38
C. Sectoral Work Plans in FY2017 ................................................................................................ 40
Annex I: The IMF Regional Technical Assistance Centers (RTACs)................................................... 56
Annex II: PFTAC Staff ........................................................................................................................ 59
Annex III: PFTAC Results-Based Management Logical Framework FY2016 ..................................... 62
Annex IV: PFTAC Missions and Meetings in FY2016 ........................................................................ 97
Annex V: PFTAC Results-Based Management Logical Framework FY2017 ................................... 108
1 The cover photo on this Report is of a portion of a mural by students from the Leulumoega Fou School of Fine Arts
at Faleolo International Airport, Samoa.
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Acronyms
ABS Australian Bureau of Statistics
ADB Asian Development Bank
AFSPC Association of Financial Supervisors of Pacific Islands Countries
AGA Autonomous government agency
APD IMF Asia and Pacific Department
BPNG Bank of Papua New Guinea
CD Capacity Development
CIS Compliance Improvement Strategy
CMU Cash Management Unit
CSO Community Service Obligation
DFAT Australian Department of Foreign Affairs and Trade
ESS External Sector Statistics
EU European Union
FAD IMF Fiscal Affairs Department
FMA Financial Management Act
FMIS Financial Management Information System
FRCA Fiji Revenue and Customs Authority
FSM Federated States of Micronesia
FP Financial Programming
FY Fiscal year
GDP Gross Domestic Product
GFS Government Financial Statistics
GIZ German International Cooperation Agency
HIES Household Income and Expenditure Survey
HLD High level dialogue
HQ (IMF) Headquarters
IA Internal audit
ICD IMF Institute for Capacity Development
IFMIS Integrated Financial Management Information System
IMF International Monetary Fund
IPSAS International Public Sector Accounting Standards
IT Information technology
LEG IMF Legal Department
LTX Long-term expert or resident advisor
MCM IMF Monetary and Capital Markets Department
MFAT New Zealand Ministry of Foreign Affairs and Trade
MFEM Ministry of Finance and Economic Management
MFNP Ministry of Finance and National Planning
MOF Ministry of Finance
MORC Ministry of Revenue and Customs
NCD Non-communicable disease
NRBT National Reserve Bank of Tonga
NTR Non-Tax Revenue
NSO National Statistical Office
OCO Oceania Customs Organization
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OECD Organization for Economic Cooperation and Development
PAC Public Accounts Committee
PASAI Pacific Association of Supreme Audit Institutions
PEFA Public Expenditure and Financial Accountability
PFM Public Financial Management
PFTAC Pacific Financial Technical Assistance Centre
PIC Pacific Island Country
PICPA Pacific Islands Centre for Public Administration
PIF Pacific Islands Forum
PIFS PIF Secretariat
PIFMA Pacific Islands Financial Management Association
PINACLE Pacific Islands National Accounts Compilers and Local Experts Association
PITAA Pacific Islands Tax Administrators Association
PNG Papua New Guinea
PSSC Pacific Statistics Steering Committee
RAFIT Revenue Administration Fiscal Information Tool
RAP Resource Allocation Plan
RBM Results-Based Management
RBNZ Reserve Bank of New Zealand
RMI Republic of the Marshall Islands
RTAC Regional Technical Assistance Centre
SC PFTAC Steering Committee
SEACEN South East Asian Central Banks Center
SERF Samoa Economic and Revenue Forecasting model
SOE State-Owned Enterprise
SNG Sub-national government
SPC Secretariat of the Pacific Community
STA IMF Statistics Department
STI Singapore Regional Training Institute
STX Short-term Experts
TA Technical Assistance
TADAT Tax Administration Diagnostic Assessment Tool
TYPSS Ten Year Pacific Statistics Strategy
UNESCAP United Nations Economic and Social Commission for Asia and the Pacific
USP University of the South Pacific
VAT Value Added Tax
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I. OVERVIEW OF THE PACIFIC FINANCIAL TECHNICAL ASSISTANCE CENTRE
A. Institutional Framework
1. The Pacific Financial Technical Assistance Centre (PFTAC) was established in 1993 to promote
macro-financial stability in Pacific island countries (PICs) through a focused program of technical
assistance and training. PFTAC was the first of the International Monetary Fund (IMF) regional technical
assistance centers, representing a collaborative venture between the International Monetary Fund, the
member countries, and bilateral and multilateral donor partners.2 The goal of PFTAC is to strengthen the
institutional capacity of Pacific countries to design and implement sound macroeconomic and financial
policies. Macroeconomic and financial stability, in turn, are essential underpinnings for sustainable
economic growth and the achievement of Sustainable Development Goals.
2. PFTAC assistance is provided to sixteen PICs. These comprise 13 members of the IMF, including
Federated States of Micronesia (FSM), Fiji, Kiribati, Nauru, Palau, Papua New Guinea (PNG), Republic of
the Marshall Islands (RMI), Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu, plus the
Cook Islands, Niue and Tokelau.
3. PFTAC’s operations are funded by contributions from a variety of sources. In the current Phase
IV funding cycle, running from mid-2011 to late-2016 (FY2012–FY2017), funding is being provided by the
Asian Development Bank (ADB), Australia, the European Union (EU), Korea, and New Zealand. In addition,
Fiji contributes through the provision of free office space; member countries also contribute through in-
kind and financial support for training activities in the region. The IMF contribution finances the center
coordinator and the running costs of the office, including local support employees.
4. The framework for PFTAC’s operations, as well as for its accountability, is largely determined by
the program established at the beginning of each funding cycle. The program for the Phase IV cycle
continues to emphasize the provision of capacity development (CD), which comprises technical assistance
(TA) and training, in five core areas: (i) public sector financial management (PFM); (ii) revenue policy and
administration; (iii) financial sector supervision; (iv) macroeconomic statistics; and (v) macroeconomic
management. In each area, the activities of the seven PFTAC resident advisors, as well as of supporting
short-term experts (STX), are linked to specific outcome objectives in a Results-Based Management (RBM)
framework. PFTAC staff work closely with IMF headquarters staff, both in planning of the work program,
and in its implementation. PFTAC provides accountability to its members through Quarterly Reports,
which report on activities, finances, and performance in relation to those objectives; the Annual Report;
and through its Steering Committee meetings, which are now held on an annual basis. In addition, the
program provides for an external independent evaluation of PFTAC, which took place in FY2015.
2 See Annex I for an overview of the IMF Regional Technical Assistance Centers (RTACs).
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B. Capacity Development Strategy
5. TA and training provided by PFTAC reflects the priorities set out in the agreed program but also
needs to adapt to evolving regional priorities and the needs of member countries. The objectives set out
in the funding program provide a basic medium-term framework for guiding PFTAC’s activities. At the
same time, however, PFTAC priorities and activities need to take into account the evolution of objectives
set by regional leaders, as well as the activities of other development partners. The annual work program
is agreed at the beginning of the financial year as part of the integrated IMF Resource Allocation Plan
(RAP) but changes are made in the course of the year to accommodate emerging CD requests. The PFTAC
RAP is prepared under leadership of the Asia Pacific Department (APD), in close collaboration with PFTAC
staff and the functional departments supporting the delivery of TA and training in the region.
6. PFTAC’s broad objectives and performance indicators are set out in its Results-Based
Management (RBM) framework (see Annexes III and V), and a range of specific activities are undertaken
to attain these objectives over time while recognizing the varied needs in the region, as outlined below.
Public Financial Management
7. The overall objective is to assist members with strengthening PFM systems. Activities are guided
by the regional PFM Roadmap approved by Pacific Islands Forum Leaders and Finance Ministers in 2010.
They are concentrated in two main areas: (i) supporting the Public Expenditure and Financial
Accountability (PEFA) assessment process and developing realistic reform priorities; and (ii) hands-on
technical support and training in specific reform areas such as legal frameworks, budgeting cycles, budget
preparation, medium-term fiscal planning, cash management, commitment control and accounting.
Revenue Policy and Administration
8. The primary objective is to assist members with the design and implementation of broad-based
and efficient revenue systems. PFTAC’s activities are guided by its previous analysis of regional priorities
and lessons learned and by benchmarking national tax administrations against the requirements of a
model tax office developed through the regional tax administrators association (PITAA). Major areas of
activity focused on in the first half of the program cycle included: (i) design and implementation of tax
reforms, including value added taxes (VAT) and small business taxes; (ii) assistance with legislative
changes needed to support tax reforms, including in the natural resources area. More recently revenue
activity has focused on development and implementation of tax compliance improvement strategies and
performance measurement.
Financial Sector Supervision
9. The principal objective in this area is to promote development and implementation of sound
financial system regulation and supervision, so that financial systems may contribute to economic
development and growth without excessive risks to financial stability. Activities involve assisting central
banks and supervisory agencies with development of appropriate regulations and statistical returns and to
regularly produce and analyze financial soundness indicators. The focus of support is now moving towards
building capacity for on-site examinations, analysis of financial returns, and adoption of a risk-based
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approach to assessment for banks, and modernization of regulatory an supervision frameworks for credit
unions.
Macroeconomic Statistics
10. The overall objective is to help members develop more timely and reliable macroeconomic
datasets based on enhanced source data. PFTAC’s support to PIC’s statistics takes place in the context of
the Ten Year Pacific Statistics Strategy (TYPSS) created as a result of a regional statistical benchmarking
study and implementation plan. National accounts statistics are the main current focus with additional
advice and training being provided in external statistics, price indices and government finance statistics.
PFTAC coordinates closely with Secretariat of the Pacific Community (SPC) which has a large program of
support for social/demographic statistics and some support for economic source data.
Macroeconomic Management
11. This area, which was added in the Phase IV program, has the principal objective of improving
macroeconomic analysis and forecasting capacity. It seeks to achieve three main outcomes: (i) the
formulation of fiscal and monetary policy is based on empirical analysis; (ii) countries employ medium-
term projections and fiscal planning and budgeting to ensure policies and debt levels are sustainable; and
(iii) long-term fiscal pressures are identified and addressed. To achieve these outcomes PFTAC activities
focus on assisting countries to develop integrated macroeconomic and fiscal frameworks for use in policy
analysis, forecasting and debt sustainability analysis; on strengthening inter-agency coordination; and on
sharing experience and expertise among policy analysts and advisors across the region.
C. Management and Implementation of Capacity Development
12. PFTAC is managed by a Coordinator, and CD is provided by seven resident advisors with
substantial expertise in their respective sectors, and supported by four administrative employees in our
Suva office (see Annex II). Under the Phase IV program, the number of resident advisors was raised by
three to a total of seven, of whom two work in the PFM area, one in revenue administration, one in
financial supervision, two in macroeconomic statistics, and one in macroeconomic analysis. The advisors
are based in Fiji; they travel extensively throughout the region, which allows them to develop rapport with
country authorities and familiarity with national and regional contexts and needs. The advisors also
manage the short-term experts (STX) employed to assist with delivery of the CD programs. The skill mix of
the advisors reflects the priority needs of the member countries. The Coordinator and advisors are
assisted in delivering the CD program, finances, reporting, travel arrangements, workshop and conference
logistics and other Centre activities by four locally-engaged staff.
Work Planning
13. The Phase IV program objectives provide general guidance for planning the CD activities of
PFTAC. Developing more detailed work programs, including country strategies and individual CD activities
draws on a range of other inputs, including IMF headquarters advice, collaboration with other
development partners and regional organizations, and dialogue with PFTAC’s member countries. Close
integration with IMF headquarters staff enhances the focus and quality of PFTAC work. Under the
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umbrella of the broad CD strategic priorities defined by the IMF Board, the Asia and the Pacific
Department plays a key role in identifying and prioritizing CD needs, in close collaboration with functional
(CD) departments and country authorities. The CD departments (specifically, in the case of PFTAC, the
Fiscal Affairs Department (FAD), the Legal Department (LEG), the Monetary and Capital Markets
Department (MCM), the Statistics Department (STA), and the Institute for Capacity Development (ICD))
are responsible for CD delivery. In conjunction with PFTAC resident advisors, they lead the work plan
development, and design, approve and direct the implementation of CD programs delivered by RTAC
resident advisors, STX, and missions from headquarters. They also provide overall quality control,
monitoring, backstopping, and supervision. This integration between PFTAC and IMF headquarters helps
to provide depth as well as breadth of experience together with greater consistency of advice across
countries and policy areas than would otherwise be possible.
14. PFTAC collaborates closely with regional organizations and development partners to ensure that
CD programs are complementary. The Pacific Islands Forum (PIF) plays a key role in the region in setting
priorities for reforms or capacity building that directly affects PFTAC’s activities. As noted earlier, PFTAC’s
activities with regard to PFM follow the strategy established by the PIF leaders in 2010, while activities in
the area of statistics come under the TYPSS. Additionally, and increasingly, CD priorities are being worked
out in conjunction with regional professional associations supported by PFTAC (See Box 1). PFTAC also
collaborates with other development partners in planning and delivering CD. Partners include multilateral
organizations such as ADB, the PIF, UN agencies, and the World Bank, as well as national agencies such as
the Australian Department of Foreign Affairs and Trade (DFAT), the Australian Bureau of Statistics (ABS),
the EU, the German International Cooperation Agency (GIZ), the New Zealand Ministry of Foreign Affairs
and Trade (MFAT), the Reserve Bank of New Zealand (RBNZ), and Statistics New Zealand. Collaboration
may take the form of information sharing in order to avoid duplication or working at cross-purposes, but
can also involve more active cooperation in designing and delivering complementary CD.
Box 1: Pacific Regional Professional Associations
PFTAC has assisted in the development of four professional associations in the Pacific. These are the Association of
Financial Supervisors of Pacific Countries (AFSPC), the Pacific Islands Tax Administrators Association (PITAA), the Pacific
Islands Financial Managers Association (PIFMA) and the Pacific Islands National Accounts Compilers and Local Experts
Association (PINACLE).
These associations help reinforce national level reform efforts through sharing of knowledge and experience, and
identification of common issues and best regional practices. They have also helped PFTAC and other development
partners identify thematic priorities and have been used to organize and deliver training programs.
The associations are generally managed around annual heads’ meetings. Annual governance meetings allow high-level
discussion of regional issues and set the agenda for regional work. They also provide a forum for interaction with other
development partners. The chairmanship generally rotates amongst member countries with the PFTAC advisor acting as
secretariat, except in the case of the PITAA which has established its own secretariat. Funding comes from a mixture of
member country and PFTAC funds. High-level seminars and training are occasionally attached to the heads’ meetings.
Separate training events deliver capacity building. The associations have been used to organize training on topical
issues. The training events often lead to clusters of country-level TA; for instance the ADB/PFTAC program of assistance
on internal audit that followed PIFMA training. PFTAC has fully funded training events, including some study tours.
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15. CD programs are necessarily designed in close consultation with national authorities. Effective
collaboration is greatly enhanced by being based within the region, and by having advisors who typically
spend several years at PFTAC. These relationships form the bedrock of PFTAC’s success and are crucial for
adapting the knowledge and skills available through PFTAC to the specific needs, timetables, and
constraints of its members. In addition to substantive country visits, resident advisors provide rapid
responses to country officials, using email, phone and information technology. Work programs are
regularly amended to enable urgent country requests to be responded to quickly while maintaining
momentum towards strategic goals.
Modes of CD Delivery
16. PFTAC delivers country-specific TA and training. Country-specific CD primarily involves missions
by resident advisors and STX to the member countries to provide specific assistance. Such assistance can
be quite varied in terms of content. It may involve very hands-on help with generating outputs (e.g.
national accounts statistics), or training more clearly focused on capacity building, or higher level advice
on design and implementation of policy or organizational reform. Depending on the skills or knowledge
needed, and to leverage the inputs of the resident advisors, PFTAC may staff such missions with STX
drawn from the relevant IMF functional department’s roster of experts.
17. PFTAC also delivers regional capacity-building TA and training through workshops and seminars.
PFTAC uses small “sub-regional” workshops to deliver focused, hands-on assistance to countries with
similar capabilities and interests in various areas. Such workshops effectively combine TA and training.
They also allow for very helpful sharing of experiences and local solutions. Examples have included
specialized workshops on national accounts compilation, medium-term expenditure forecasting, drafting
of legislation on credit unions, and macroeconomic modeling issues for central banks or finance
ministries. In addition, of course, there are also more traditional training courses aimed at the whole
membership, addressing region-wide issues.
18. PFTAC often collaborates with other development partners in conducting workshops and
seminars on topics of broad regional relevance. For example, PFTAC works with the Pacific Association of
Supreme Audit Institutions (PASAI) on accounting and auditing issues; it has also collaborated with the
Secretariat of the Pacific Communities (SPC) and the ABS in putting on workshops on macroeconomic
statistics; and with the SPC on deep sea mining issues; and has been working with the United Nations
Economic and Social Commission for Asia and the Pacific (UNESCAP), the Asian Development Bank (ADB),
and the Pacific Islands Forum Secretariat (PIFS) to run workshops on macroeconomic modeling and
applied analysis. Apart from facilitating regional level discussions of issues affecting the region as a whole,
such workshops provide an opportunity for workshop participants to develop informal networks with
their colleagues in the region.
Challenges
19. Effective translation of the CD provided by PFTAC into attaining the ultimate objectives of such
assistance faces several important challenges. These include very limited absorptive capacity in several
countries, limited ownership of reforms, political economy factors that place low value on or reject the
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objectives, and coordination weaknesses with other development partners, as well as PFTAC’s own
limitations:
Almost all of PFTAC’s activities involve working with, and helping to develop, an adequate pool of
skilled staff. However, human capacity, both in terms of numbers and education levels, is a
particular challenge in many member countries. Staff turnover, which may be fairly easily coped
with in larger countries, often leads to substantial reduction in technical capacity which is not
easily replaced. As a consequence, an important part of TA and training in such circumstances is
focused more on maintaining or restoring capacity, rather than on substantially raising it. In some
other cases, where capacity is extremely limited or non-existent, TA really involves capacity
supplementation, i.e. directly supporting production of outputs, rather than capacity
development.
Reforms may stall or be reversed unless there is broad political and popular support. This is
particularly challenging in small countries, where personality politics are important and where the
drive behind reforms may be associated with particular individuals. A change in government or
finance minister can significantly affect the content and pace of a reform program. Moreover,
PFM and tax reforms often involve changes that would limit the scope for unaccountable
discretion in the use of public funds, and this may run against long-standing political or
bureaucratic practices.
Development partners with somewhat different objectives may well end up either competing
over the allocation of scarce local human capacity, or may advocate inconsistent measures or
priorities. Examples include how much of a country’s statistical capacity to allocate to economic
statistics versus health or environmental data, or development partners seeking to insulate
development project finance and management from the general government budget.
PFTAC’s own staff resources are limited, constraining the overall volume of TA and training,
although effective use of STX allows PFTAC to extend its support well beyond the capacity of its
staff based in Suva. Additionally, PFTAC is limited in the kinds of TA and training that it can
provide. In particular, it does not provide long-term in-country experts or advisors to
governments, and has no on-line training capacity, although the IMF’s Institute for Capacity
Development (ICD) has begun to provide on-line training courses available to a broad audience.
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II. REVIEW OF FY2016 (MAY 2015-APRIL 2016)
This section describes PFTAC’s major activities in FY2016. It provides an overview of PFTAC’s performance
over the period as well as an update on financing under the Phase IV funding cycle. It also provides a more
detailed reporting on performance in relation to the FY2016 RBM objectives and work plan.
A. Overview
Main achievements
20. PFTAC TA and training during the year continued to focus on the objectives set out in the
Results-Based Management (RBM) Logical framework for FY2016 (Annex III):
Progressive strengthening of PFM within the region through PEFA assessments and associated
PFM roadmap development and reviews;
Supporting modernization of revenue frameworks, including through revisions to legislation and
strengthening capacity in tax compliance and administration;
Building capacity in on-site and off-site bank supervision, as well as promoting development of the
credit union sector;
Developing or improving the quality, frequency, and information content of national accounts
statistics, as well as providing training to build skills in national statistics agencies;
Assisting finance ministries and central banks with developing macroeconomic models and skills
needed for policy analysis and forecasting.
21. Since FY2015, however, the focus of activities has shifted. For the first three years of Phase IV, a
primary focus of much of PFTAC’s CD activity was to assist members with assessing priorities for reforms
to policy frameworks and then with the design of reforms and necessary enabling legislation. Since then,
and particularly during FY2016, there has been increasing emphasis on implementing reforms through
improvements in institutional capacity and staff training. In the PFM area, this has led to greater emphasis
on integrating budgeting and planning with a more medium-term orientation, as well as strengthening
budget execution, monitoring, and accountability processes. In the revenue area, emphasis has shifted
towards strengthening core functions of tax administrations, including improving compliance, risk
management, and taxpayer services. In financial sector supervision, with significant progress having been
made in improving off-site bank supervision, the focus now is on strengthening on-site examination, and
extending supervisory coverage to credit unions. In statistics, increasing emphasis is being placed on
improving data sources and methodology. In macroeconomics, the focus has been shifting from building
basic capacity to integrating model-based analysis into fiscal and monetary policy formulation.
22. Important progress has been achieved in several areas:
In the PFM area:
Several PEFA assessments, re-assessments and PFM reform roadmaps were begun or
completed, with increased country ownership of the processes;
Significant headway was made by PNG towards improving financial management information
and cash management;
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Fiji made important progress in improving budget reporting transparency;
Vanuatu made important progress in strengthening internal audit.
In revenue administration:
The program to strengthen core processes and tax compliance has strengthened further,
though it will take some time to see major result;
Fiji completed a Tax Administration Diagnostic Assessment;
The Pacific Islands Tax Administrators’ Association (PITAA) took significant steps towards
establishing itself as a regional resource and reform leader.
In financial supervision:
The on-site bank examination program is being implemented, including reporting of findings;
Several countries are in the process of modernizing credit union legal and supervision
frameworks;
Credit union financial reporting templates have been developed for use by regulators,
including establishing ratio analysis and standards.
In macroeconomics:
Progress has been made in several countries, notably including Cook Islands and Tonga, in
strengthening policy analysis and forecasting frameworks, and using them in budget
preparations.
In statistics:
Fiji has made significant progress in developing quarterly GDP data;
Solomon Islands published their annual GDP estimates without assistance, following several
capacity-building missions;
Several countries are making more effective use of tax data in improving GDP estimates in a
cost-effective way.
23. Specialized sub-regional workshops have become an important element in PFTAC’s delivery of
TA and training. These allow training to be much more closely tailored to the specific needs and capacity
of the countries involved, so that they more closely resemble hands-on TA rather than more general
training. Sub-regional workshops have been held on national accounts compilation in the northern Pacific
and in Melanesian countries, risk-based banking supervision in the northern Pacific, as well as revenue
and expenditure forecasting.
24. Much of PFTAC’s work requires close cooperation with development partners and, increasingly,
with regional professional associations and intra-regional collaboration. In CD delivery, PFTAC continued
to work closely on the ground with other CD providers. In training, PFTAC routinely partnered with other
agencies in designing, funding, and delivering workshops and seminars. Increasingly, partners within the
region, including the professional associations supported by PFTAC, as well as other groupings, such as
PEFA peer reviewers, have taken on an important role in informing and assisting PFTAC’s activities.
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25. PFTAC continued its efforts to increase its transparency. In FY2016 PFTAC continued to publish
its Quarterly Report, reporting on highlights of the activities during the quarter and progress towards RBM
objectives; providing an update on PFTAC finances; our work plan going forward; and articles on topics
that we feel deserve a wider audience, either because they illustrate the sort of work that PFTAC has been
doing, or highlighting issues of regional relevance that may not be well-understood by most non-
specialists. With the emphasis on the Quarterly Report, publication of a monthly report is judged to be
somewhat superfluous.
26. PFTAC has also been an active participant in meetings aimed primarily at improving
coordination among development partners. Efforts to strengthen coordination with development
partners have included participation in quarterly meetings of economic CD providers and donors in Suva;
Heptagon meetings of development partners; the Pacific Statistics Steering Committee (PSSC);
information sharing ahead of and following donor meetings with authorities or IMF missions; as well as
more ad hoc meetings with development partners.
CD delivery in FY2016
27. In FY2016 the scale of PFTAC TA and training activities eased slightly from FY2015. In FY2015
activity was boosted partly by the use of STX to deliver CD, especially in building capacity in tax
compliance in the region, and partly by a surge in demand for PFTAC assistance as political and economic
developments in the region favored an acceleration of reform efforts, particularly in the area of PFM. In
FY2016 these factors continued to keep CD activity at a high level, although slightly less than in FY2015.
Based on data to January 20, 2016, and projections through to end-April, country-specific TA and training
missions are estimated to have declined 12 percent from 171 in FY2015 to 150 in FY2016. In terms of
mission days, the estimate for FY2016 is little changed from FY2015, at 1670 person days. In addition,
PFTAC staff provided or participated in 26 workshops, seminars, and regional meetings, slightly fewer than
in FY2015. An increasing number of such workshops were held in conjunction with other development
partners.
28. CD in the areas of PFM, tax administration
and financial supervision dominated PFTAC TA
delivery in FY2016. These areas also accounted for
most of the use of STX. In the revenue area, this
reflects the implementation of the strategy to use STX
to boost delivery of CD on tax core processes and
compliance. In financial supervision STX are the main
means of delivering CD with regard to the on-site bank
examination program. In the PFM area, STX were used
less as part of mainstream TA delivery than in meeting
needs for specific expertise, notably in financial
management information systems (FMIS), cash
management, and internal audit.
29. Most country-specific TA has been delivered by STX, while resident advisors dominate in
provision of workshops. In FY2016 the number of missions conducted by the Suva-based resident
Fig. 1: Sectoral distribution of PFTAC TA in FY2016 (Percentage of total mission days)
Financial Supervision
22%
Macro-economics
9%
PFM28%
Revenue25%
Statistics14%
Legal2%
PFTAC Annual Report 2016
Page | 10
advisors (LTX) declined to 79 from 100 in FY2015, while the number of missions carried out by STX and HQ
staff was almost unchanged at 71. In terms of mission days, the majority (58 percent) of country-specific
TA continued to be delivered by STX, reflecting the fact that STX missions are typically longer than the LTX
missions. With regional workshops, seminars, and conferences, however, resident advisors predominate.
LTX were involved in 65 percent of workshops and seminars, and accounted for a small majority of the
mission days.
30. Fiji, Samoa, and PNG were particularly
large users of PFTAC CD in FY2016. In Fiji, CD was
provided on revenue issues (compliance, audit, and
tax law); statistics (national accounts); financial
supervision (credit union oversight); and
accounting and reporting reforms. In Samoa, the
main areas of CD were in PFM (fiscal oversight of
SOEs, cash management, accounting and
reporting); tax administration (compliance); and
financial supervision (on-site bank examination and
supervisory oversight). In PNG, CD continued to be
provided in the areas of PFM (FMIS, cash
management and PEFA follow up) and statistics
(national accounts).
B. PFTAC Spending and Financing in FY2016
31. In FY2016, PFTAC spending is estimated at
US$ 5.6 million, down from US$ 6.2 million in
FY2015.3 Of this, US$ 2.5 million (45% of donor-
financed expenditure) is accounted for by the
salaries and travel expenses of PFTAC’s 7 Suva-
based advisors. US$ 1.6 million (29%) is estimated
to be spent on costs of CD delivery by STX. A
further US$ 0.7 million (11%) is estimated to be
spent on seminar and work shop costs (mainly
travel and accommodation expenses of
participants). Headquarters (HQ) delivered CD,
backstopping and project management costs is
estimated to come to $US 0.4 million (7%), and
evaluation and Steering Committee (SC) costs and
3 The estimate is based on PFTAC data on travel costs for LTX as well as fees and expenses for STX for the financial
year up to January 20, and expected costs associated with missions and workshops in the work plan through to end-
April. The figure of $6.2 million for FY2015 is well above the estimate of $5.6 million presented in last year’s Annual
Report, based on information up to early February.
Fig. 2: Country distribution of PFTAC TA in FY2016(Percentage of total mission days)
Fig. 3 PFTAC expenditure components in FY2016 (in US$ millions)
Cook Islands6%
Fiji11%
FSM4% Kiribati
4%
Nauru2%
Palau4%
PNG10%
Regional18%
Samoa11%
Solomon Islands
4%
Timor-Leste3%
Tonga8% Tuvalu
2%
Vanuatu9%
Niue1%
RMI3%
LTX Salaries,
$2.03
LTX Travel,
$0.46
STX CD
delivery, $1.60
Training &
Conferences, $0.67
HQ CD, back-
stopping & Proj. mgmt,
$0.38
Misc., eval'n
& SC, $0.15 Trust Fund,
$0.36
PFTAC Annual Report 2016
Page | 11
miscellaneous costs are estimated at around US$ 0.2 million (3%). The remaining US$0.4 million (7%
percent) comprises the trust fund management fee.
32. The main area in which spending exceeded budget projections was with respect to STX costs.
(Table 1). As discussed in the 2015 PFTAC Annual Report, the delivery of TA has typically exceeded the
amount in the initial work plan for the year by significant margin. Since the budget projection is based on
the initial work program, some overshooting of the budget projection was expected, and that is exactly
what happened in FY2016, as use of STX in TA delivery was higher than initially planned.
33. The overall financial position of PFTAC appears to be a bit tighter than expected. In the PFTAC
Phase IV Program budget revision agreed at the 2015 Steering Committee Meeting, the extension of the
Phase IV to October 2016 was based on the assumption that PFTAC spending in FY2015 and through to
the end of the Phase IV would average about $5.8 million per year. In FY2015 and FY2016, however,
average spending appears to be coming in somewhat higher, at about $6.0 million. As a consequence,
remaining Phase IV resources are about $0.2 million less than had been planned at this stage.
34. PFTAC will need to husband resources carefully in FY2017. Movements in exchange rates vis-à-
vis the US dollar since the revision of the Phase IV budget mean that PFTAC funding is approximately $0.1
million less than had been assumed. In addition, because there is no bridge financing or buffer facility
between funding phases, PFTAC will need to build some margin of protection against unanticipated
expenditures near the end of Phase IV. Consequently, we will need to take a cautious approach to
planning of missions and workshops in the first half of FY2017. Additionally, some adjustments are likely
Table 1: PFTAC Estimated Budget Position in FY2016
in US$ millions
FY 2015 FY 2016 FY 2016
Estimated
out-turn2
Long-term experts 9.80 8.77 1.03 1.98 2.03 2.03 0.00
Short-term experts 5.81 5.27 0.54 1.75 1.10 1.59 0.49
Travel 2.56 2.32 0.24 0.58 0.39 0.46 0.06
Workshops and seminars 2.93 2.40 0.52 0.70 0.77 0.72 -0.05
HQ TA delivery,
backstopping & project
management
1.77 1.69 0.08 0.50 0.34 0.35 0.01
Evaluation & SC 0.63 0.41 0.22 0.28 0.16 0.03 -0.14
Miscellaneous 0.22 0.23 -0.01 0.04 0.03 0.03 0.00
Total TA Delivery 23.72 21.09 2.63 5.83 4.83 5.21 0.37
Trust fund management
(7%) 1.66 1.48 0.18 0.41 0.34 0.36 0.03
Grand Total3 25.38 22.57 2.81 6.23 5.17 5.57 0.401 To April 30, 2016
2 Based on IMF data for FY2012-2015 and PFTAC estimates for FY2016
3 Fiji and IMF contributions not included
FY 2012 – FY 2016
Activity
2015
Revised
Program
Budget
Expenses
2012-161,2 Remaining DifferenceOut-turnBudget
Projection
PFTAC Annual Report 2016
Page | 12
to be required to subcomponents of the budget in order to move funding from surplus areas to areas
where allocations are insufficient.
35. The PFTAC Phase IV funding envelope has been finalized at $25.3 million. A final contribution by
New Zealand in December 2015 – a transfer of remaining funds from PFTAC Phase III – completes the
contributions to PFTAC funding in the current Phase (Table 2). The appreciation of the US dollar over the
past year or so has meant that the US dollar value of contributions is about $0.1 million less than
anticipated, and this will need to be reflected in the FY2017 budget.
Table 2: PFTAC Consolidated Financial Status
December 31, 2015
Units as indicated
ADB 1,000,000 signed 7/29/2011 U.S. dollars 1,000,000 1,000,000 -
EU 1,345,339 signed 07/01/2011 Euros 1,000,000 1,345,339 -
New Zealand NZAID 7,052,475 signed 06/16/2011 NZD 8,900,000 7,052,475 -
Australia DFAT 7,500,000 signed 05/25/2011 U.S. dollars 7,500,000 7,500,000 -
Korea 2,181,029 signed 02/15/2012 W (Korean Won) 2,500,000,000 2,181,029 -
EU (ACP) 1,391,400 signed 10/04/2013 Euros 1,000,000 1,391,400 -
EU (2nd LOU) 4,656,781 signed 12/27/2013 Euros 3,500,000 4,656,781 -
Total 25,127,024 25,127,024 0
FAA transfer of remaining
funds:
New Zealand 165,058 Completed 12/2015 U.S. dollars 165,058 165,058 -
Subtotal 165,058
Grand Total 25,292,082 25,292,082 0
Balance
(US$)
Phase IV - Signed
Agreements
Secured
(US$ dollars)
LOU
Status
Contribution
Currency
Pledge
(Contribution
Currency)
Contributions
Received
(US$)
PFTAC Annual Report 2016
Page | 13
C. Sectoral Achievements in FY2016
Public Financial Management
36. In FY2016, PFTAC carried out 40 country
missions (totaling 472 person days) and conducted 4
regional workshops on PFM topics. Of these
missions, over half were conducted by the two Suva-
based PFM advisors, while the others were
conducted by STX or HQ-based staff. In terms of
mission days, nearly 2/3 of missions were conducted
by STX. The major areas of assistance were with PEFA
assessments and Roadmap development (RBM
objectives 1.1 & 1.2); strengthening medium-term
orientation of budgeting (RBM objective 1.6);
improving budget execution and monitoring (RBM
objective 1.7); and budget accounting, recording and reporting (RBM objective 1.8). The major users of CD
in the PFM area were PNG, Samoa, and Vanuatu.
37. In accordance with the PFTAC program objectives (Annex III), the work of the PFM advisors
continued to be concentrated in four general categories:
Support for PEFA4 assessments and PFM Roadmaps;
Assistance with fiscal strategy and budget management;
Assistance with budget execution, monitoring, and accountability;
Training to promote long-term PFM system sustainability and inclusiveness.
PEFA and PFM Roadmap support
38. PEFA assessments and PFM Roadmaps: As in previous years, a key focus of PFTAC TA has been to
support PEFA assessments across the region (RBM objective 1.1) and assist in the development of PFM
Reform Roadmaps (RBM objective 1.2). Our approach to both PEFAs and PFM Roadmaps continued to
emphasize greater participation of country officials in order to promote more country ownership of the
products. PFTAC’s work on PEFAs and Roadmaps during the year was concentrated on PNG (finalizing
the external assessment and assisting with the preparation of a Reform Roadmap), Vanuatu
(assisting officials to conduct a self-assessment as a prelude to beginning roadmap development),
and Tuvalu (in coordination with Australia’s Assessment of National Systems, assisting officials to
conduct a self-assessment to inform roadmap updates). The PNG Government endorsed the
Roadmap in September. It placed highest priority on expanding the coverage of its new Integrated
Financial Management System (IFMS) and improving cash management. During the February-April period
PEFA self-assessments have been tentatively scheduled for Nauru (in coordination with DFAT's
4 PEFA: Public Expenditure and Financial Accountability
Fig. 4: 2016 PFM missions: Distribution of mission days by RBM objectives
(in percent; RBM codes in Annex III)
1.1
15%
1.2
13%
1.3
7%
1.6
11%
1.7
31%
1.8
23%
PFTAC Annual Report 2016
Page | 14
Assessment of National Systems) and Kiribati; and follow-up discussions are planned with FSM and RMI on
possible PFTAC TA to implement their Roadmaps. In September PFTAC also participated in a joint case
study development with the World Bank, ADB, and DFAT to review strengths and weaknesses of
approaches to PFM reforms. Progress on PEFAs and Roadmaps is summarized in Box 1:
Box 1: PEFA Assessments and PFM Roadmaps in Pacific Island Countries
PEFA Activities in the PFTAC Region PFM Roadmap Activities
Most
Recent
External
PEFA
Support
Number
External
PEFAs
PFTAC-
Guided Self-
Assessment
Planned
PEFAs
Most
Recent
Roadmap
Roadmap
Development
Support
Planned
Roadmap
Dev Efforts
Cook
Islands
2014 PFTAC 2 2013 - 2011 Self -
FSM 2012 PFTAC 1 2012 - In process PFTAC -
Fiji 2012 PFTAC 2 2012 - In process PFTAC -
Kiribati 2009 EU 1 - Self:
FY16
2011 EU -
Nauru 2010 ADB 1 - Self:
FY16
Revised
2014
ADB/ PFTAC -
Niue 2011 PFTAC 1 - - Revised
2014
PFTAC -
Palau - - 0 2013 - - - -
PNG 2015 PFTAC/IMF-
HQ
1 2014-15 - 2015 PFTAC/IMF-
HQ
-
RMI 2012 PFTAC 1 2012 - 2013 PFTAC -
Samoa 2013 PFTAC 3 2013 - 2014 Self -
Solomon
Islands
2012 EU1/ 2 2012 - 2014 PFTAC -
Timor-
Leste
2010 - 2 - - - - -
Tokelau - - 0 2014-partial Self/Ext:
FY17
- - -
Tonga 2010 AusAid 2 2014 - 2014 PFTAC -
Tuvalu 2011 ADB 2 2015 - 2012 PFTAC -
Vanuatu 2012 EU 2 2015 - - - PFTAC-FY17
1/ PFTAC assisted a Self-Assessment and served on the PEFA Oversight Committee
39. PFM legal frameworks: Having a comprehensive law clearly laying out basic PFM principles and
identifying both Finance Ministry and Line Ministry responsibilities for implementing disciplined PFM is
essential. Equally important is the need for updated PFM regulations or financial instructions specifying
required steps for various types of financial transactions, as well as budget preparation and review
processes, and accounting and financial reporting requirements. Work in this area during FY2016
included:
Technical assistance to the Cook Islands to review and revise their Financial Management Act
(FMA);
PFTAC Annual Report 2016
Page | 15
A workshop (jointly sponsored with SPC) on fiscal and tax matters that should be considered in
drafting legislation relating to deep sea minerals;
Fiscal strategy and budget management
40. Integrated medium-term planning and budgeting frameworks. PFTAC places a high priority on
improving budget preparation with particular emphasis on better integration of policy/project planning
and budgeting within a medium-term framework (RBM objectives 1.4-1.6). While some PICs have shown
small gains on the PEFA indicator focused on a multi-year, policy focused perspective in fiscal planning and
budgeting, this aspect of PFM in the PICs still is among the weakest of the PFM components assessed by
the PEFA. To assist members with building their capabilities in this area, in FY2016 PFTAC’s PFM advisors:
Continued periodic short consultations with the Fiji Budget Department on the new budget
format adopted last year. The 2016 Fiji budget sustains the addition of policy-focused explanatory
narrative at the program/activity level, and a clearer display of changes in funding levels, including
for the medium-term.
Conducted a workshop (with the IMF) focused on PFM Fiscal Frameworks. It explored several
aspects of macro-economic forecasting, medium-term fiscal planning, and building buffers to
reduce vulnerability to unexpected events. Most PICS participated along with several donor
partners.
Conducted a workshop on Medium-term Expenditure Planning for National Sustainable
Development (in coordination with PFTAC's Macroeconomics Advisor and UNESCAP). The
workshop emphasized the importance of:
Maintenance by Cabinets of a disciplined fiscal note process for all policy
changes/projects being considered;
Budget departments keeping track of expenditure "tails" on policies/projects already
approved in the past by Cabinets/Parliaments
Paying closer attention to the effect of demographic flows on costs of providing
significant public services; and
Building adequate fiscal buffers for debt service, asset repair/replacement, and response
to natural disasters
Reviewed social security/pension issues. Any discussion of medium (or longer) term budgeting
and planning cannot ignore addressing social security and pension matters. Because of their long-
term nature, social security and pension programs must be very carefully developed and
managed. During FY2016, PFTAC (in cooperation with the IMF HQ’s Expenditure Policy Division)
provided TA to the Fiji National Provident Fund to evaluate changes made since 2006. In the
March-April 2016 period a sub-regional workshop is planned for FSM, Palau and RMI, to examine
sustainability of their existing defined benefit social security systems
41. Fiscal Oversight of State-Owned Enterprises (SOEs): SOEs have created fiscal problems in many
PICs. Because of emerging demands from PICs, PFTAC TA in this area was started in FY2016. The first
country to request was Samoa, and a mission was conducted in September 2015 in time for the
PFTAC Annual Report 2016
Page | 16
establishment of a new Ministry of Public Enterprises (MPE). MPE and MOF adopted the mission’s
recommendations which mainly cover: (i) improving fiscal risks management by developing a risk
assessment framework; (ii) enhancing fiscal transparency by reporting all transfers from central
government and between SOEs, as well as full accounting of community service obligations (CSO); and (iii)
strengthening accountability by clarifying in the Statement of Corporate Objectives the financial
expectations, and reporting accountabilities of SOE Boards. MPE has incorporated these
recommendations in its work plan for 2016, and started improving the guidelines for corporate planning
and reporting by SOEs. It is expected that in 2016 the annual MPE report to the Cabinet will include
information on transfers from central government and between SOEs, outstanding CSO costs, loan
guarantees, and other fiscal risks.
42. Non-Tax Revenue (NTR) Reviews: Work conducted jointly by PFTAC and the Australian
Department of Finance in 2013 to review Samoa’s non-tax revenues has generated interest by other
PICs. For the last two years from 2012/13 to 2014/15, Samoa was able to increase its NTR by at least
18 percent annually. Other countries where PFTAC assistance in this area was provided earlier and is
in process include Fiji, PNG, Solomon Islands, and Vanuatu. NTR reviews should occur annually as part of
budget officers’ standard review of agency budgets. Upcoming training will emphasize this as one of many
different types of issues that analysts should consider as they carry out such reviews. Further work in this
area was moved to FY2017 due to priority changes at the country level.
Budget execution, monitoring, and accountability
43. Budget Execution. PEFA assessments reveal that in general, PIC performance in several areas of
budget execution remains weak. In FY2016, PFTAC has provided tailored TA to strengthen capacity in four
main areas:
Budget execution controls. Financial Management Information Systems (FMIS) are useful tools to
strengthen internal control in treasury processes, but can be very costly to set up. Donor partners
and PICs themselves have requested assistance from PFTAC to evaluate systems and recommend
strategies for moving forward. In FY2016, TA support for this was provided to PNG and Tonga.
Cash management. Cash planning and lack of access to short-term financing remain important
issues in the region. Temporary, within-year mismatches in revenue and expenditure tend to
disrupt orderly execution of the budget, leading to poor service delivery, cash rationing, and/or
(temporary) accumulation of arrears. Specific assistance in this area was provided to PNG and
Samoa in FY2016 to analyze the sources of its cash management difficulties and to propose
solutions.
Transparency. Demand for greater transparency in reporting has prompted PICs to generate
additional information and integrate this into their financial reporting. TA in adopting
international public sector accounting standards (IPSAS) was provided to Fiji, and similar TA is
ongoing for Tonga and Samoa.
44. IFMIS Design/Management: Starting in May 2014 PNG has received technical assistance from
a PFTAC short-term advisor to restructure the operation of its Integrated Financial Management
System (IFMS). Assistance continued during FY2016. The TA has enabled expansion of the system to
PFTAC Annual Report 2016
Page | 17
225 departments (compared to the 3 connected when assistance commenced last year) with 2
additional departments currently scheduled to come on line by the end of December 2016, and
discussions are under way with 21 additional agencies with a view to 2016 roll-outs. PFTAC is also
assisting Tonga with IFMIS enhancement. The IFMIS Project in Tonga has a broader scope that includes
both software and non-software issues. Tonga recently created an IFMIS Steering Committee within the
Ministry of Finance to oversee and coordinate IFMIS reforms. It has adopted the PFTAC recommendation
to give priority to improve the accounting framework and Chart of Accounts, while evaluating options on
the software.
45. Cash management: This TA program covers the improvement of cash balances consolidation,
banking arrangements, payment and collection procedures, cash flow planning and forecasting, cash
allocation, and cash monitoring. During FY2016 both PNG and Samoa requested assistance. Work in
PNG resulted in the adoption of an improved cash management strategy and the development of
standard procedures on bank reconciliation, creation of a Cash Management Unit (CMU), and coordinated
planning among the Department of Finance, Department of Treasury, Internal Revenue Commission, and
Bank of PNG for the adoption of a cash pooling/sweeping scheme. Timelier bank reconciliation and inflow
of cash resources is expected upon implementation of this scheme. In Samoa, 50 participants from
Ministry of Finance (MOF) and line ministries attended a seminar on good cash management practices in
November 2015; Cash Management Unit staff were trained on using a liquidity model template for cash
forecasting; and proposed strategy was adopted by the MOF to improve cash reporting, forecasting, and
consolidation of cash balances.
46. Accounting and Reporting: TA in this area includes review of accounting policies, chart of
accounts, reconciliation procedures, consolidation, and transparency of reporting. Major efforts included
TA to Fiji in implementing its accounting reform, and a joint accounting and auditing workshop conducted
in cooperation with PASAI. In early 2016, PFTAC will provide TA to Tonga and Samoa, by assessing the
gaps of existing practices vis-à-vis international standards, and formulating a clear transition plan.
47. In Fiji, progress has been consistent in implementing accounting reform, starting from its 2013
financial statements. The latest audited (2014) financial statements have become largely IPSAS compliant
on a cash basis. A new debt accounting and reporting policy is now being implemented to further improve
the accuracy, relevance, and transparency of public debt information. Assistance to Fiji is expected to
continue in improving its accounting and reporting policies, as part of its transition to accrual accounting.
48. The joint PFTAC-PASAI workshop on IPSAS on November 23-27, 2015 brought together
government accountants and auditors from Fiji, Cook Islands, Marshall Islands, Papua New Guinea,
Samoa, Solomon Islands, and Tonga. The main benefits from the workshop as indicated in the
participants’ evaluation were: (i) better understanding of the relevance and linkages of IPSAS to PFM
performance, (ii) clearer guidelines and models on proper planning and sequencing of reforms; and (iii) for
the first time, exchange of experiences and a joint planning of accounting and auditing reforms by
government accountants and auditors. They came up with a common objective with a harmonized reform
strategy for the medium term. The unifying objective in all countries was to improve the quality of
5 Based on update as of December 8, 2015
PFTAC Annual Report 2016
Page | 18
financial reporting through adoption of IPSAS. The workshop enlightened both accountants and auditors
on the requirements, and challenges of adopting IPSAS, thus levelling expectations. A similar presentation
was made to a wider audience of government accountants and auditors in Fiji and Tonga.
49. As a first step, the participating accountants and auditors planned to continue a joint discussion
of a clear way forward to implement accounting and auditing reforms such as raising awareness and
appreciation among key stakeholders of the benefits, implications, and requirements in adopting IPSAS. In
FY2017 a similar workshop will be proposed for accountants and auditors from the rest of the Pacific
Island countries.
50. Internal Audit: TA on internal audit focuses on improving capacity in conducting risk-based audits.
TA during FY2016 was concentrated on Vanuatu. Work with Vanuatu started in FY2015 with training to
the staff on international standards, and in using the Teammate software for audit planning and
monitoring. This led to some improvements of the internal audit (IA) function as indicated by an improved
rating in the June 2015 PEFA self-assessment (from D+ to C+). The number of internal audits has increased
and audit reports have been issued more regularly and there has been slight improvement in the
management responses to internal audit recommendations. A follow-up mission was conducted in
October FY2016 to further train the IA Unit in risk-based auditing focusing on payroll, and using the
advanced modules of the TeamMate software. As a result, the IA Unit has improved its Audit Plan and
Risk Assessment Framework, and staff have improved their work efficiency by using the software.
Workshops and Seminars
51. PFTAC PFM advisors are involved in regional workshops and seminars. These were
discussed in the topical sections above, but are highlighted again in this section for readers who want
a comprehensive overview of regional activities:
A workshop on PFM Fiscal Frameworks (with the IMF).6 It explored several aspects of macro-
economic forecasting, medium-term fiscal planning, and building buffers to reduce
vulnerability to unexpected events. Most PICS participated along with several donor partners.
In August PFTAC collaborated with the Secretariat of the Pacific Community (SPC) to host a
workshop on fiscal issues related to managing revenues from Deep Sea Mineral mining. A
Fiscal Framework document on these issues is expected to be published jointly in the next
few months.
A workshop on Medium-term Expenditure Planning for National Sustainable Development
was held in Nadi in early November, jointly coordinated by PFTAC's PFM and
Macroeconomics advisors, and UNESCAP. Participants included representatives from budget
6 The workshop was funded by the Australian government, jointly hosted by the IMF and the Fijian government, and
included staff from PFTAC, the IMF’s Asia and Pacific and Fiscal Affairs Departments, and the Institute for Capacity
Development.
PFTAC Annual Report 2016
Page | 19
and planning departments in countries on financial years other than calendar years (CY)7.
The workshop will be repeated in February for countries with calendar year financial years.
Topics covered included:
Cost pressures from demographic movements;
Developing and maintaining disciplined fiscal note review processes on all new policy or
project proposals being considered by Cabinets;
Keeping track of cost tails on previously adopted policies or projects requiring a multi-
year phase-up;
Improving the integration of planning and budgeting to insure future fiscal space for
developing quality spending;
Estimating fiscal buffers for managing debt service payments, asset repair/replacement,
and response to natural disasters.
A joint PFTAC-PASAI workshop for government accountants and auditors to enhance capacity and
better coordination in planning and implementing accounting and auditing reforms. Participants
included accountants and auditors from Fiji, Cook Islands, PNG, RMI, Samoa, Solomon Islands, and
Tonga.
A sub-regional workshop on defined benefit social security systems is planned in March-April 2016
for FSM, RMI, and Palau. It will focus on issues related to both benefit policies and achieving
sustainable financing.
52. Successful PFM Reform requires high level political support. It is not just a technical matter, and
it most certainly is not just a Finance Ministry issue. Two years ago PFTAC started a “High Level Dialogue”
(HLD) project aimed at improving Line Secretary, Cabinet Members, and Parliamentarians’ appreciation
for PFM Reforms and their role in those reforms. From 2014-15, two HLDs were conducted in Solomon
Islands to promote political support to the PFM Reforms. Additional HLDs have been requested by PIC
officials as part of their orientation plans for newly elected Cabinet members and Parliamentarians. In
January 2016, one PFM Advisor and one PFTAC STX participated in a PASAI/DFAT-initiated workshop for
the Tonga Public Accounts Committee (PAC). The workshop discussed the role of the Committee in the
scrutiny of the budget and the accounts, good practices in the Pacific, fundamental issues on the budget
and the accounts, and possible measures of improving the effectiveness of legislative scrutiny. The
workshop led to important resolutions of the PAC, one of which is to review the Committee’s composition
and functions. A follow-up workshop was requested through PASAI to develop Parliamentarians’ capacity
on budget review.
53. Broader capacity development included training through regional institutions and processes:
PFTAC continued active partnering with the University of the South Pacific (USP) and the
Pacific Islands Centre for Public Administration (PICPA) on sustainable training for PFM
professionals in the region. Discussions with PICPA on developing/implementing training have
7 This selection was done in order to avoid taking officials on calendar year financial years away from their budget
preparation activities; and also to keep the discussion groups to a more comfortably interactive size.
PFTAC Annual Report 2016
Page | 20
focused primarily on procurement, training for budget analysts (including procedures for
regular reviews of non-tax revenues), and accounting
Participation in a PIFS coordinated efforts to get greater donor harmonization of approaches
to integrating PIC planning, budgeting and aid management.
Revenue Policy and Administration
54. In FY2016, PFTAC carried out 36 missions
(totaling 425 person days) and conducted 10 regional
workshops on revenue policy and administration
issues. Of these missions, 61 percent (and 76 percent
of mission days) were conducted by STX and HQ-based
staff, with the rest conducted by the Suva-based
revenue advisor. As with the PFM area, workshops
generally involved both the resident advisor and STX.
The major areas of work involved strengthening
capacities for verifying and maintaining taxpayer
information and compliance obligations (RBM objective
2.3); assisting with implementation of risk-management
principles (RBM objective 2.4); and improving tax
compliance strategies (RBM objective 2.5). The
principal users of revenue administration CD included Fiji, Kiribati, Tonga, and FSM.
55. The PFTAC Baseline Assessment, a qualitative tool developed by PFTAC in 2010 as a tool for PIC
tax administrations to assess the operational capacity of their tax administrations against a regional
benchmark for tax administration shows that most tax administrations have made considerable
progress. The assessment, based on nine core components of tax administration, is self-assessed and
provides stakeholders with an important perspective of how tax administrations view their progress and
areas where additional work is needed. The Baseline Assessment model will run concurrently with the
IMF’s newly developed Tax Administration Diagnostic Assessment Tool (TADAT), which assesses against
international good practice in tax administration. The TADAT, over the next few years will gradually
replace the Baseline Assessment. Figure 6 below reflects findings from the most recent regional Baseline
Assessment carried out in September 2015.
Fig. 5: 2016 Revenue Administration missions: Distribution of mission days by RBM objectives
(in percent; RBM codes in Annex III)
2.25%
2.332%
2.424%
2.517%
2.714%
2.88%
PFTAC Annual Report 2016
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Fig. 6: PITAA Baseline Assessments: 2010-2015
Source: PITAA
56. Good progress was made during FY2016 where PICs made additional progress in the adoption of
modern policy and legal frameworks. Box 2 provides an overview.
Box 2. Adoption of Modern Tax Policy and Legal Frameworks (RBM 2.1 and 2.2)
Fiji
New Income Tax Act enacted in November 2016.
Nauru
Employment and Services Tax Act and Revenue Administration Act enacted. Business and presumptive tax
legislation drafted (implementation targeted July 1, 2016).
Papua New Guinea
Extensive Tax Policy and Legal Review currently underway.
Samoa
Income Tax Act and Tax Administration Act redrafted. VAGST legislation reviewed and legislation for a
presumptive tax drafted and enacted.
Solomon Islands
New policy and legislation for mining developed and enacted.
Tonga
Tax Policy for small business developed and enacted. Deep Sea Mining legislation developed and enacted.
Vanuatu
Review of VAT and Property Tax Legislation undertaken.
57. The largest proportion of PFTAC CD in FY2016 (42 percent) was geared towards assisting PICs
improve their core tax functions. Due to the fact that most PICs have made progress implementing strong
policy and legal frameworks, the emphasis of CD shifted to improving core tax functions in line with
modern revenue administration. This included on the ground technical assistance to identify key
weaknesses in core business functions that often contribute to low levels of taxpayer compliance.
Initiatives included strengthening audit, arrears and returns management and introducing a more
0
2
4
6
8
10
12
2010 2013 2015
PFTAC Annual Report 2016
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proactive taxpayer services approach to help taxpayers comply with their tax obligations. These activities
were further supported by PFTAC’s training plan which raised the importance of becoming more
performance focused to meet taxpayer expectations. Box 3 highlights achievements in this area.
Box 3: PFTAC assistance in improving Core Tax Functions
Fiji
Improved audit capability through the creation of a new Audit Planning and Risk Management Unit.
A new risked based audit plan, auditor time tracking and quality assurance program.
Development of key risk filters to streamline risk management and a 3 year comparative analysis auditors’
toolkit and financial ratio’s to test compliance across key industry sectors.
New business processes to streamline debt and returns management.
A plan to improve core tax functions (linked to an overall compliance improvement strategy).
FSM
A new taxpayer services unit.
A plan to improve audit, collection of arrears and returns management (linked to an overall compliance
improvement strategy).
Kiribati
Implementation of a new function based structure including a taxpayer services unit.
Palau
Strengthened management of core tax functions by introducing a new function based organizational
structure.
Samoa
A full review of the arrears and returns filing functions and the development of a strategy to improve
performance.
Tonga
A review of the current structure and recommendations to move towards a more functional approach. Vanuatu
A plan to improve core tax function performance (linked to an overall compliance improvement strategy).
58. A core PFTAC deliverable in FY2016 included improving operational performance and voluntary
compliance through the adoption of risk-based compliance improvement strategies (CIS). This approach
provides a framework for how the agency intends to respond to the most significant tax risks. Most
countries in the region have invested very little effort in this area whilst some are maturing in both the
application and the development of targeted risk treatments. The importance of this issue, and
acknowledging that improving compliance is a long term effort, is accepted by tax administrations that
have benefited from PFTAC technical assistance and training provided in this area. Box 4 provides
highlights from FY2016.
Box 4: Implementation of Risk-Based Compliance Improvement Strategies (CIS)
Fiji
The FRCA 2016 CIS outlines two administration areas (taxpayer services and trade facilitation) and six
taxpayer segments (large, medium, small, construction, real estate and supermarkets) for close attention.
FSM
Three high risks (fuel, tobacco and alcohol) were identified and incorporated into a Compliance
Improvement Strategy which has generated good results.
PFTAC Annual Report 2016
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Samoa
The plan includes strategies to enhance risk management capability, strengthen the Ministry’s
understanding of risk to revenue, improving the understanding of obligations for businesses, industries,
agents for tax and customs, increasing on-time filing and the reduction of tax arrears.
Tonga
Two pilot projects provided a practical basis for analyzing compliance behavior. These projects
(consumption tax refunds and medium retailers) are to be expanded into a more comprehensive
compliance improvement strategy during 2016.
Vanuatu
The plan includes a renewed audit focus on high risk taxpayers, a plan to reduce current debt and
outstanding return levels. An Industry Partnership approach has been designed to improve compliance in
the Shipping Industry, Wholesale and Retail and Tourism Industry.
59. Creating an understanding of the Compliance Risk Management approach, a key prerequisite of
introducing a CIS, has been achieved through numerous workshops which have provided PICs with an
understanding of the theory and practice behind the OECD’s Compliance Risk Management Cycle. To
further support the process PFTAC facilitated a workshop for PICs which highlighted the important
linkages between a CIS, data analysis, performance management and measurement. Modern compliance
management represents a new way of work for PICs and will take time to fully implement – nevertheless
good progress has been made in setting up institutional arrangements to support the process which is
summarized in Box 5 below.
Box 5: Structural and governance arrangements to facilitate a Risk Management Approach
Fiji
A new Audit and Risk Management Unit designed and implemented;
A Compliance Council to guide implementation of the CIS and to ensure that initiatives are successfully
delivered according to objectives and expected outcomes;
IT support to monitor newly developed performance standards linked to the CIS.
FSM
A framework to measure and monitor impacts of the new risked based CIS which includes monthly
reporting.
Samoa
A Compliance Risk Management Committee established to provide strategic leadership, direction and
governance over the management of risks and plan implementation.
Tonga
The creation of a dedicated Risk Management Unit.
Vanuatu
A Risk Management Team to facilitate the introduction of a CIS;
A “dashboard” management system to monitor newly developed performance standards.
60. PFTAC assisted a number of PICs modernize their operating structures to facilitate streamlined
revenue administration and more effective use of resources. Most PICs have recognized that their
organizational and staffing arrangements still suffer from a number of shortcomings. Often, functions
need to be further developed and aligned to modern revenue administration. Box 6 provides an overview
of the good progress currently being made in this area.
PFTAC Annual Report 2016
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Box 6: Improving Organizational and Operating Structures
Fiji
Improved the current structure by incorporating an Audit Planning and Risk Management Unit.
Arrears and returns collection functions strengthened.
FSM
Modernization Team and Steering Committee appointed to oversee reforms.
A new dedicated taxpayer services unit established.
Kiribati
A new function-based organizational structure was designed and presented to the Inland Revenue Board
who accepted the proposals. PFTAC further assisted in the design of new position descriptions and provided
training relating to new roles and responsibilities.
Palau
A new function-based organizational structure implemented and supported by new job descriptions.
61. The importance of strategic planning as a management tool to guide revenue administration
and to ensure the effective utilization of resources has been extensively promoted by PFTAC. Because
PICs operate in varied environments, face different challenges and have different visions for the future,
PFTAC encourages even the smallest countries to document the future vision and aspirations of their
organizations. Box 7 provides an update of activities in this area.
Box 7: Development of Strategic and Operational Plans for PICs
Fiji, FSM, Samoa, Tonga and Vanuatu
Operational planning has been significantly strengthened through the adoption of Compliance
Improvement Strategies, the design of which was facilitated by PFTAC.
Palau
A Strategic Plan with the following strategic outcomes:
o Raising revenue collections by improving the level of voluntary compliance by addressing the risks
to compliance through assistance and enforcement interventions making it easier for taxpayers to
comply and harder not to.
A business plan which incorporates the following key elements:
o Modernized legislation, improved risk management and the development of a compliance
improvement strategy, migration to a new IT system, the development of standard operating
procedures and working in partnership with key stakeholders.
RMI
A Strategic Plan designed with two core strategic objectives:
o Promote voluntary compliance;
o Improve internal processes to sharpen compliance management.
An Operational plan designed with a focus on:
o Improving the collection of tax arrears and outstanding returns;
o Improving the audit function;
o Implementing Customs reforms.
62. PFTAC has provided substantial support in elevating the Pacific Island Tax Administration
Association (PITAA) to a recognized training institution. After 10 years of nurturing and development
PITAA, over the last year, has taken its biggest steps towards independence by appointing staff to the
PFTAC Annual Report 2016
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secretariat, formalizing the constitution and collecting annual subscriptions from members. PFTAC has
funded numerous training programs and conferences and facilitated regional knowledge sharing from
which PICs have benefited. This included addressing the need to improve management capability - a key
issue identified in the PFTAC/PITAA training needs analysis conducted in June 2014. Box 8 provides an
overview of PFTAC/PITAA training activities conducted during FY2016.
Box 8: PFTAC/PITAA Regional Training Activities FY2016
Taxpayer Services: The main purpose of this regional activity was to provide management and key staff involved
in the taxpayer services function with a comprehensive overview of modern taxpayer services management. This
training also included a train-of-trainer program which will facilitate the handover of this training module to
PITAA.
Audit: This management workshop, the first of its kind in the Pacific highlighted the formal planning processes
which need to be instituted at a strategic, operational, and case level and the importance of linking the audit
function to an overall taxpayer compliance improvement strategy. Two nominated PITAA officials participated in
a train-of-trainer program and have developed sufficient skills to co-present at the next workshop.
Arrears and Returns management: These workshops assisted PICs in developing strategies to improve on-time
filing, on-time payment and methods to keep tax arrears at acceptable levels.
Compliance Risk Management: This activity was designed to assist countries in acquiring skills to develop
Compliance Improvement Strategies by using structured and disciplined approaches in line with the OECD Risk
Management Cycle.
Performance Management: This workshop provided PICs with an in-depth understanding of data usage and
performance measurement in modern tax administration.
Revenue Forecasting and Compliance Management: This workshop provided participants with an in-depth
insight into how to improve tax compliance, manage tax risks, how to improve data collection, data quality, data
matching and data sharing and the impacts on revenue forecasting.
2015 PITAA Annual Heads Meeting: The theme of this year’s annual meeting was “Modernizing Tax
Administration in the Region”. The first day of the meeting focused on the development of PITAA as an
organization whilst the last two days focused on topical regional issues.
63. The IMF’s Revenue Administration Fiscal Information Tool (RAFIT) is increasingly being
recognized by PICs as an important management information source for PIC’s. Over the last year PICs
have been encouraged to use the IMF’s RAFIT, a data-gathering initiative designed to collect tax and
customs information. The data gathered includes both quantitative and qualitative information and
encompasses a mixture of tax administration baseline and profile data, inputs, and performance related
data. To date eight countries have completed Round 1 and analysis has been made available. PICs that
have not yet completed the RAFIT have been requested to do so to ensure they obtain full benefits of
PFTAC’s technical assistance.
PFTAC Annual Report 2016
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Financial Sector Supervision
64. In FY2016, PFTAC’s delivery of CD in the area
of financial sector supervision rose sharply, with 28
missions (totaling 361 person days) and
participation in 6 regional workshops and meetings.
The increase in activity mainly reflected increased
use of STX to deliver CD. As a result, the share of
missions and mission days accounted for by the
resident advisor fell to a little over half of the total.
The major areas in which assistance was provided
with CD related to strengthening on-site supervision
(RBM objective 3.4); development of standardized
examination reports (RBM objective 3.5); and
development of legal and supervisory frameworks for
credit unions (RBM objective 3.9). Major users of CD in these areas were Samoa, Timor-Leste, Vanuatu,
and Tonga.
65. The primary focus of CD in the financial sector continues to be the strengthening of prudential
supervision of banks in member countries. The main elements of the strategy to achieve this include:
Assisting member countries with development or revision of central bank and financial
supervision legislation;
Assistance with development of financial returns and reporting forms for use in monitoring of
supervised banks;
Training in on-site bank supervision with actual support during the execution of an examination,
including report writing;
Building sector capacity with the oversight of credit unions including standardized reporting and
the introduction of modern legislation;
Providing advanced technical support with the supervision of banking conglomerates;
Provide secretariat and technical training to members of the Association of Financial Supervisors
of Pacific Countries (AFSPC).
66. In FY2016, Technical Assistance concentrated on strengthening on-site bank examination. With
regular bank reporting established, and standard financial indicators now available, the next challenge
was to ensure effective use of this information in bank oversight through an on-site banking examination
program. Strengthening performance in this area required the establishment of a program that would
provide each country with direct support with its on-site examination program. (RBM 3.4, 3.5):
The Northern Pacific region and Timor-Leste were provided with a workshop on effective on-
site examination preparedness: PFTAC secured the services of a STX who develop a program
designed to prepare examiners for the execution of an on-site examination which included the
off-site analysis of commercial banks in order to establish risk and priorities. The workshop
enabled participants to scope and make plans for their upcoming examination by establishing
selection parameters based on data acquired during an off-site review of the financial
performance of their banks. This activity culminated in the selection of a candidate bank for
Fig. 7: 2016 Financial Sector Supervision missions: Distribution of mission days by RBM objectives
(in percent; RBM codes in Annex III)
3.10
5% 3.4
34%
3.5
29%
3.8
5%
3.9
27%
PFTAC Annual Report 2016
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examination, which resulted in the drafting of an engagement letter and the selection of team
members and allocating tasks. Participants left our workshops with a better understanding of the
complexity of the risk assessment and on-site examination process and are now adequately
prepared for the responsibilities placed upon them to actually perform an examination and report
its findings.
FSM, Palau, Timor-Leste, Tonga, and Samoa, conducted examinations of selected commercial
banks with training and support provided by PFTAC STX. Supervisors and examiners were
provided with a short workshop on a topic relevant to the upcoming examination prior to
physically entering the bank. With the support of the expert and the training received during the
preparedness program, the examiners were able to perform the task at hand and review the
books and records of the bank, as wells as, the loan portfolio. This activity resulted in the
production of an examination report which was presented to the bank’s management during the
exit interview and subsequently formally submitted for comments and corrective actions.
PFTAC provided technical assistance to the Bank of Papua New Guinea (BPNG) with developing
and delivering a workshop on Consolidated Supervision of Conglomerates. This event was
designed to support the bank with its supervision and examination of the Bank of South Pacific. As
a result of participating at this workshop it is expected that supervisors are able to adequately
review the operations of the Bank of South Pacific and affiliates to ascertain sound business and
financial practices are adhered to.
67. The second major area of PFTAC activity during FY2016 was in strengthening frameworks for
operation and supervision of credit unions (RBM objectives 3.8, 3.9). Credit unions have the potential to
play a very important role in the financial institution network of Pacific Island Countries. In a region where
there is only limited competition among banks, credit unions have the potential to offer healthy
competition in the provision of financial services to the public, leading to improved efficiencies and
stronger financial systems. In addition, credit unions can provide access to finance—both lending and
savings—for groups that may not be well-served by banks, including women and people living in rural
areas.
68. PFTAC’s efforts with regard to credit unions in FY2016 have mainly focused on strengthening
legislative and regulatory frameworks. The principal activities have included:
A workshop organized by PFTAC and hosted by the Reserve Bank of Fiji was held in October. The
event included representatives from the Attorney General’s office, the Ministry of Finance, the
Registrar of Credit Unions and members of the Reserve Bank’s Supervision Department with the
IMF Legal Department (LEG) and PFTAC moderating the sessions. A sample Credit Union Act was
introduced by the LEG representative who provided a base for deliberating on the key
components of what an Act should contain. This exercise resulted in the compilation of a Credit
Union Act that is compliant with international standards while respondent to local requirements.
The Reserve Bank will lead the group through the next phase of the legislative process, with the
support of the Attorney General’s office.
Following the successful Fiji example, PFTAC hosted a regional workshop on drafting Credit Union
Acts for Tonga, Samoa, Solomon Islands, and Vanuatu. With the lead from LEG, representatives
from those countries gathered in Fiji to work on developing amendments to or new Credit Union
PFTAC Annual Report 2016
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Acts for their respective jurisdictions. With the support of PFTAC’s team of experts, the group
clarified why credit unions need to be treated differently than banks. They eventually established
the level of amendments required to upgrade their current law to international standards or
recognized the need to simply repeal the existing legislation and replace it with a new Act.
69. While the legal reform was moving forward, PFTAC worked with the Banking Supervision
Department of a number of countries to execute a series of workshops on strengthening credit union
accounting and financial reporting capacity. The aim of those workshops was to review each financial
statement and adjust them, as required, to establish the level of compliance a credit union would have
against the requirements outlined in the proposed Credit Union Act. This review was performed in Fiji,
Micronesia, Palau, Samoa, and Solomon Islands. The result indicated that more than three quarters of
credit unions surveyed would be compliant with the requirements of a Credit Union Act, enacted based
on current international standards. Twenty percent would be compliant given a few years to achieve the
minimum required base while 5 percent would not be able to continue operating, mostly due to their very
small membership base. The balance of the region will be performing this task in 2017.
70. PFTAC provided legal support to the National Reserve Bank of Tonga (NRBT) with its revision of
existing and the drafting of new sets of bank Prudential Returns and Regulations. The Reserve Bank had
received technical assistance from LEG with the amendments of its banking and financial institutions Act
which prompted the need to revise its set of Prudential Statements to be in keeping with the
amendments. The existing documents were reviewed and recommendations were provided to the
Reserve Bank. The Reserve Bank further took this opportunity to seek assistance with the drafting of an
Operational Risk Regulation.
71. PFTAC is also assisting Tuvalu with establishing bank reporting and a supervisory capacity for its
banks. Although legislation for establishing a Banking Commission has been enacted, some modifications
were needed to facilitate implementation of supervision. LEG provided options which were presented to
the Minister of Finance for consideration. PFTAC has also assisted with developing a draft prudential
return that was successfully tested with the Tuvalu National Bank. Additional missions will be forthcoming
to introduce banking sector oversight options and to assist the authorities with the implementation of
prudential returns and off-site supervision protocols. (RBM 3.1, 3.8)
72. PFTAC participated in a number of regional events on financial sector supervision issues. In
addition to the workshops noted earlier in the context of TA and training, PFTAC participated in:
The Annual Meeting of the AFSPC, hosted by the Central Bank of Solomon Islands, in August 2015.
In addition to the regular overview and discussion of supervisory developments and issues, the
meetings included:
A two day workshop was held on the theme of “How to examine bank board’s performance
and good governance.” Under the leadership of an expert provided by PFTAC the group
focused its discussions and simulations on Basel core principle 14, the revised Corporate
Governance Principles and Organization for Economic Cooperation and Development (OECD)
standards. Participants considered typical governance structures, scalability and ways to
evaluate the effectiveness of governance including best practices and regional experience was
shared by all.
PFTAC Annual Report 2016
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A second workshop saw the introduction, by the IMF, of a new Technical Assistance Needs
Assessment Questionnaire. The completion of the questionnaire will help in the evaluation of
technical assistance needs for financial sector. Participants were guided through the design
features of the questionnaire, it purpose and applications. They were invited to provide input
and discuss some of the parameters. The day culminated with an agreement that the final
draft will be completed and circulated to all members for completion. A follow-up session is
planned for the 2016 annual meeting.
The Pacific Credit Union Congress held its annual conference in Fiji and PFTAC was invited to
present two workshops during its plenary and breakout sessions. The topic of Governance,
relationship between directors and management was one topic explore while financial
management was the second. In excess of 80 delegates attended this event which further
provided PFTAC with an opportunity to discuss the reforms currently overshadowing the region.
The bi-annual Pacific Microfinance conference was one opportunity where we were able to
contribute to the planning of sector specific assistance as part of the financial inclusion programs
in place and our own non-banks programs.
PFTAC participated in the South Pacific Central Bank Governors meeting hosted by the RBNZ in
December.
Macroeconomic Statistics
73. In FY2016, PFTAC carried out 24 missions
(totaling 237 person days) and conducted or
participated in 4 regional workshops in the area of
macroeconomic statistics. The two Suva-based
statistics advisors carried out 63 percent of the
bilateral missions (56 percent in terms of mission
days). The primary areas in which CD was provided
included assistance with improving data sources and
methodologies (RBM objective 4.5); improving
consistency between national accounts and other
statistics (RBM objective 4.6); and assistance with
rebasing constant price GDP estimates (RBM
objective 4.2). The major users of bilateral TA were
the Cook Islands, PNG, and Fiji.
74. The macroeconomic statistics capacity building strategy in FY2016 has continued to focus on
three main elements:
Improving the quality of national accounts data through the introduction of methodological
improvements and source data analysis (RBM objective 4.5);
Providing training on specific issues in the compilation of national accounts statistics being faced
by countries in the region;
Fig 8: 2016 Macroeconomic Statistics missions:
Distribution of mission days by RBM objectives
(in percent; RBM codes in Annex III)
4.1
1%4.2
17%
4.3
1%
4.5
29%4.6
24%
4.8
12%
4.9
13%
4.4
3%
PFTAC Annual Report 2016
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Providing country-specific TA with either training or implementation of improvements of
methodologies and compilation procedures.
75. There were staffing changes during the year as one of the advisors was reassigned to another
technical assistance centre in August and not replaced until January so the gap was partially filled by
making increased use of STX for national accounts as well as balance of payments and government finance
statistics, where PFTAC is picking up on the assistance provided by an HQ-based project which has now
concluded.
76. Methodological improvements and source data analysis were the focus of work done in the Cook
Islands, Fiji, Kiribati, PNG, Nauru, Niue, Tonga, and Tuvalu. In a number of these countries tax data are
becoming an increasingly important information source in preference to business surveys which are very
resource demanding and less timely than the data collected via administrative processes.
77. The results of the recent household income and expenditure surveys (HIES) in PNG, Solomon
Islands and Tuvalu were analyzed and will be incorporated in the national accounts estimates during
2016. These surveys, which are on-going on a 5-yearly basis throughout the Pacific, enable these countries
to show progress against the milestones and have their constant price national accounts rebased at least
every ten years (RBM objective 4.2). In June the advisors contributed to a workshop attended by HIES data
users from the region which reviewed the results of recent surveys, particularly the one held in Nauru in
2012/13, and standardized reporting formats. PFTAC outlined the importance of HIES data in measuring
the informal sector and household consumption in the national accounts.
78. Training on specific topical methodology issues and data analysis was provided through sub-
regional training courses. These have become increasingly important in recent years as they are cost-
effective and enable countries at a similar stage of national accounts development to receive formal
training on specific issues and also to take the opportunity to share their experiences with each other. A
course was held in PNG for local participants and also statisticians from Fiji, Solomon Islands, and
Vanuatu, which focused on the use of HIES data and the techniques involved in rebasing the national
accounts which is important to maintain the accuracy of economic growth measures. A follow-up course
was held in Pohnpei for the Northern Pacific countries (FSM, Palau, and RMI) which continued to focus on
building staff capacity, and improving the methodology by introducing additional data sources including
the results of recent business surveys. These courses enable these countries to reach their next
milestones by removing existing methodological deficiencies and moving towards more up-to-date base
years for their constant price measures.
79. A third course was hosted in Fiji where PFTAC combined with the SPC to train regional price
statisticians on two important aspects of index compilation—quality adjustment and item substitution. An
on-going problem throughout the region has been the lack of a simple index compilation program which
compilers can use and understand so PFTAC provided training on an index compilation program
developed by the IMF, and now used in a number of countries in other regions, which it is hoped will help
address this issue.
80. Country-specific TA was provided to several countries to improve their national accounts
measures. Support was provided to Fiji to balance their 2011 supply-use tables. This work built on
previous TA provided to expand their gross domestic product (GDP) measures to include GDP estimates by
PFTAC Annual Report 2016
Page | 31
expenditures and by income (the next milestone for RBM objective 4.1). These estimates, while still
experimental, are now well advanced and ready for internal use. Fiji has also been developing quarterly
GDP estimates with PFTAC TA but publication has been delayed until 2016 as the expenditure estimates
have been given priority. Expenditure estimates were also being developed in Kiribati but progress has
been slow due to lack of local staff resources. Recent TA provided to the Solomon Islands came to fruition
when they finalized and released their 2014 estimates of Gross Domestic Product (GDP) estimates in
January without direct input from PFTAC. Balance of payments assistance (RBM 4.9) was provided to the
Cook Islands with the use of a STX and this resulted in current account estimates being prepared for
publication.
81. PFTAC resumed assistance to PNG in 2014 and this has continued to be a priority. In coordination
with the ABS, which now has two resident statistics advisors in country, we have continued to work with
the authorities and are focusing on national accounts development. Progress has been slow due to the
lack of experienced staff and the National Statistical Office (NSO) is not expected to publish GDP estimates
until the second quarter of 2016 and this will require close involvement of the resident ABS advisors in
addition to PFTAC TA. We will continue to support the agencies compiling national accounts including the
BPNG and the Treasury until the NSO resumes regular compilation and publication of reliable national
accounts statistics.
82. Phase II of the TYPSS for 2015-2017 has now been developed and endorsed by the Pacific
Statistics Steering Committee (PSSC). PFTAC has continued coordination within PSSC and is an active
member of three of the working groups—the household survey group and two promoting the use of
administrative data and data dissemination and use.
Macroeconomic Analysis and Forecasting
83. In FY2016, PFTAC carried out 17 missions
(totaling 144 person days) and conducted or
participated in 4 regional workshops (involving 54
person days) in the area of macroeconomic analysis
and forecasting. Most missions (75 percent) were
conducted by the Suva-based macroeconomics
advisor, and workshops were conducted in
collaboration with other PFTAC advisors and
development partners. The main areas of activity
involved providing assistance with developing and
using integrated macroeconomic monitoring and
projection frameworks (RBM objective 5.1); and
building capacity in multi-year fiscal planning (RBM
objective 5.2). The principal users of bilateral TA in
this area were Cook Islands, Samoa, Solomon Islands, Tonga and Vanuatu.
84. Sound macroeconomic management requires the empirical analysis of economic developments
and a main theme and principal objective is to assist members in developing analysis and forecasting tools
Fig. 9: 2016 Macroeconomic Analysis missions:
Distribution of mission days by RBM objectives
(in percent; RBM codes in Annex III)
5.1
39%
5.3
16%
5.4
1%
5.2
44%
PFTAC Annual Report 2016
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needed to strengthen fiscal and monetary policy formulation. A quantitative tool that has been widely
used at the IMF to analyze macroeconomic developments is financial programming (FP). It provides a
consistent macroeconomic and fiscal framework for medium-term projections and can be used to
evaluate macroeconomic performance, identify vulnerabilities, prepare policy scenarios, and evaluate the
sustainability of policies.
85. Technical assistance in FY2016 focused on developing and enhancing countries’ FP frameworks.
The construction of frameworks was tailored to users’ needs and differed across countries. Emphasis was
put on developing tools jointly involving staff from the ministry of finance, central bank and statistics
office in practical, hands-on workshop environments. The collaboration and sharing of expert knowledge
across institutions was found to accelerate the development and implementation of new tools and
processes, while the sharing of data is expected to reduce duplication and free up resources for economic
analysis and forecasting.
Cook Islands: A central element of the TA provided has been to assess existing monitoring and
projection methodology used by staff at the Ministry of Finance and Economic Management (MFEM)
to support their fiscal planning process. MFEM staff use advanced models and the main focus of
PFTAC technical assistance has been on efficiency gains. The development of an integrated
macroeconomic and fiscal framework involved constructing a proxy nominal expenditure-based GDP
measure because GDP is only compiled on a production basis but more and better information is
available to forecast expenditure GDP. Specifically, tourism (exports of services) is estimated to
contribute about 60 percent to the Cook Island economy and detailed information is available from
the government accounts. The framework has been set up to forecast to 2040 to support medium-
term fiscal planning and to undertake debt sustainability analysis. It allows for changes in the
population growth rate and a next step is to enhance economic and fiscal forecasts by incorporating
demographic projections, e.g. from SPC or the United Nations.
Samoa: The Samoa Economic and Revenue Forecasting (SERF) Model has been used in budget
preparations for a few years and technical assistance mainly focuses on enhancing aspects of it. While
the SERF Model was not originally designed as a FP framework, consistency between the sectors of
the economy ensures that projections are generated within a coherent framework. It generates public
debt profiles over the medium term based on an internally consistent macroeconomic and fiscal
framework. Work is also on-going to enhance tax revenue forecasting including by strengthening the
interaction between the Ministry of Finance and the Ministry for Revenue during the preparation of
revenue forecasts for the budget. Consideration is being given to setting up an economic forecasting
committee comprising members from key public sector institutions involved in monitoring and
forecasting economic activity. The benefits of a committee producing and publishing GDP forecasts
are considered to be large.
Solomon Islands: Progress was made on incorporating public debt into the Solomon Islands FP
framework to allow performing debt sustainability analysis, which is an important tool for evaluating
and assessing the long-run impact of government policies. Offsite support was also provided to assist
in the construction of a quarterly GDP series and an output gap measure that may be used to gauge
inflationary pressures in the economy.
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Tonga: Technical assistance in FY2016 was provided jointly by PFTAC and a secondee from the RBNZ,
who was recruited by PFTAC and funded by the ADB, to build capacity for macroeconomic forecasting
and analysis and link this analysis into budget processes. The TA focused on developing a forecasting
framework with staff at the Ministry of Finance and National Planning (MFNP) for GDP and the
construction of a financial programming framework—the Tonga Projection (TOP) Model. The TOP
Model has a unique feature, which is forecasts for seasonal workers’ income. This aspect will serve as
a model for other Pacific Island countries’ frameworks, which do not have this feature. Moreover,
collaboration by staff from the MFNP and the Ministry of Revenue and Customs (MORC) led to a
revenue forecasting tool being developed with MORC staff. The MORC tax tool uses the MFNP’s
industry-level GDP forecasts as well as historical tax collection data and internal information on tax
trends, including the effects of compliance improvement and risk management activities, to forecast
tax revenues at a more disaggregated level than the TOP Model. The MORC’s bottom-up forecasts
thus complement the MFNP’s top-down revenue forecasts.
Vanuatu: Staff from the Reserve Bank of Vanuatu, the Department of Finance and Treasury, and the
Vanuatu NSO teamed up to develop a FP framework for Vanuatu, which is being applied to analyze
the effects of policy proposals. Work is on-going to construct a leading indicator for GDP to provide
additional information to the business sentiments data gathered through onsite visits, interviews and
surveys, which form the basis of official GDP forecasts by the Vanuatu Macroeconomic Committee.8
Work also started on developing a national framework for revenue forecasting that is consistent with
the FP framework. Capacity development is greatly assisted by strong management support and high
levels of motivation and dedication by staff. Moreover, Vanuatu sets a positive example for how
public policy may best be coordinated in other countries within the Pacific region.
86. The development and operation of a consistent macroeconomic and fiscal framework are
important foundations for multi-year fiscal planning and budgeting and FP frameworks have been set up
to produce medium-term projections beyond a two- or three-year budget horizon. Debt sustainability
analysis is further enhanced using the Cook Island framework as a template, which allows for the issuance
of new government debt both in domestic and foreign currencies and at different maturities and interest
rates. These features have already been incorporated into Tonga’s TOP Model. Staff at the Cook Island
MFEM have also developed a useful debt analysis tool and the Government of the Cook Islands has
established a loan reserve fund (LRF) to manage the repayment of government debt and of guaranteed
debt of state owned enterprises. Public debt has been high and rising in several countries in the region,
partly because of natural disasters, and debt repayments have been affected by large exchange
movements. The tools developed by MFEM staff will be of great benefit to other countries in the region to
assist with the management of exchange rate risks and the allocation of budget funding for debt servicing.
87. Strengthening capacity to undertake medium-term budgeting and fiscal planning was also the
focus of sub-regional workshops on expenditure and tax revenue forecasting. Government expenditures
typically involve multi-year programs and projects, requiring medium-term fiscal planning and for
governments to have accurate forecasts of revenue collections. The workshops were organized in
8 The Macroeconomic Committee comprises members from the Department of Finance and Treasury, the Prime
Minister’s Office, the Reserve Bank of Vanuatu, and the Vanuatu Statistics Office.
PFTAC Annual Report 2016
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collaboration with PFTAC’s PFM and Revenue Administration Advisors, UNESCAP, PITAA, and the Fiji
Revenue and Customs Authority (FRCA). Participants actively discussed issues through presentations and
group exercises, which led to information sharing and highlighting good practices. The workshops led to
actions for greater collaboration between institutions to better link development plans into budgets and
to improve tax revenue forecasts. Moreover, fiscal pressures arising from demographic changes were
identified as a priority area in FSM, Palau and RMI for follow-up technical assistance. Further analysis of
the effects of demographic changes will be progressed in a workshop planned for April 2016 on social
security and pension issues to be organized in RMI with participants from FSM and Palau.
III. OBJECTIVES AND WORK PLAN FOR FY2017
This section describes PFTAC’s principal objectives and activities proposed for FY2017 (May 2016 to April
2017). It outlines the main themes in PFTAC’s technical assistance strategy over the period and provides
sectoral detail of activities planned to achieve the objectives in the RBM framework, as well as a budget
projection based on the draft work plan. The proposed work program is, of course, subject to the
availability of funding in Phase V.
A. Overview
88. In FY2017 PFTAC’s CD will transit towards implementing the strategy underlying the Phase V
program. Indeed, the transition has already begun. In FY2017, the aim is to sharpen the focus on building
capacity to address key policy objectives. These include: (i) strengthening macro-financial resilience to
natural disasters, terms of trade shocks, and financial shocks; (ii) promoting long-term macro-financial
sustainability; and (iii) supporting inclusive growth. Such themes will generally involve a cross-cutting
approach drawing on different areas of PFTAC expertise, often in collaboration with development
partners, as outlined below:
Strengthening macro-financial resilience: Key requirements in this area include properly
assessing vulnerabilities, and taking a more medium-term approach to fiscal planning in order to
effectively address risks. Relevant PFTAC CD will include:
Increased emphasis on climate change issues and improving access to climate change
finance in PFM reform roadmaps;
Strengthening of efforts to better integrate fiscal planning and budgeting processes into a
consistent medium-term framework and enhancing capacity to make medium-term
public expenditure and revenue projections;
Technical assistance to develop frameworks and processes for budget execution by
managing financial commitments, debt including contingent liabilities, and other fiscal
risks according to the fiscal strategy;
Support for institutional reforms to establish or strengthen fiscal buffers;
Modification to macroeconomic projection frameworks to facilitate analysis of natural
disasters and other shocks;
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Assisting with identification and assessment of financial vulnerabilities of the household,
business, bank and non-bank financial sectors, and the public sector;
Enhanced monitoring of financial system risk through on-site bank examinations and
development of credit union oversight;
Assistance with use of administrative data, especially tax data, in national accounts
compilation.
Promoting long-term fiscal sustainability: Key elements include estimating and incorporating
long-term risks to sustainability (e.g., climate change, termination of aid grants, demographics,
and costs of non-communicable diseases (NCDs)) into macroeconomic projection and debt-
sustainability frameworks, and promoting frameworks or processes for taking these into
consideration in fiscal policy in a sustainable manner. Relevant PFTAC CD will include:
Strengthening of tax and non-tax revenue frameworks to increase domestic revenue
mobilization;
Modification of public spending and macroeconomic projection frameworks to take long-
term risks to sustainability into account;
Technical assistance to generate/report relevant, reliable, and timely fiscal data that will
be used to monitor the trends of fiscal performance and financial position
Support for PFM reforms aimed at building processes for addressing long-term fiscal and
balance of payments risks;
Assistance with ensuring consistency between national accounts, balance of payments,
and government financial statistics.
Facilitating sustainable, inclusive growth: Although there is only limited scope for PFTAC CD to
influence sustainable long-term growth or inclusiveness, CD may indirectly facilitate achievement
of these objectives:
CD in the tax and non-tax revenue areas should help reduce or eliminate many tax
distortions inhibiting growth, as well as promote greater tax equity, with benefits for
inclusiveness;
Support for PFM reforms in budget formulation, budget execution, reporting and
accountability should all help improve public sector efficiency, freeing resources for
productive use. Reforms should also potentially facilitate access to external finance,
especially for adapting to climate change, with benefits both for growth and
inclusiveness;
CD to strengthen legislation and oversight for credit unions should promote competition
and efficiency in the financial system, as well as improving access in particular for small
and medium enterprises as well as households with limited access to bank finance. This
should enhance growth as well as its inclusiveness.
89. Planning of the work program and budget is complicated by the transition to Phase V in mid-
FY2017. During the first half of FY2017 the work program will operate under Phase IV, with a complement
of 7 resident advisors and the funds remaining in the Phase IV program. Consequently, the first half of the
year will be similar to FY2016, although PFTAC faces some staff turnover during the period, which could
PFTAC Annual Report 2016
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reduce the level of CD delivery somewhat. In the second half of FY2017, the work program will operate
under Phase V, which is under discussion. A tentative work program for the second half of FY2017,
therefore, is based on the concept note for Phase V, circulated to the Steering Committee in early
February. This envisages increasing the number of resident advisors to 10, with a partner budget for the
whole of Phase V, on the order of $51 million. Clearly, the work program in FY2017 will depend on the
final outcome of the Phase V discussions. When agreement has been reached, a revised work program will
be circulated to the Steering Committee.
90. The provision of CD will continue to involve a mix of delivery by resident advisors, STX, and HQ-
based staff. STX will be used either to provide quite specialized TA, as is usually the case in PFM and
revenue administration, or to supplement TA that is being provided to more countries than can readily be
handled by the resident advisors, as has been the case in revenue administration, financial supervision,
and statistics. HQ staff will also be used from time to time to provide TA and training on specialized issues,
or on policy issues. The addition of a second macroeconomic advisor would greatly facilitate providing
increased support to fragile states with very limited capacity to carry out macroeconomic analysis, as well
as build capacity for macro-financial analysis across the region. A third statistics advisor would allow
PFTAC to provide TA and training in Government Finance Statistics (GFS) and External Sector Statistics
(ESS). The addition of a second revenue advisor would allow PFTAC to significantly increase its delivery of
CD in the priority areas of core tax functions already identified.
91. CD will continue to involve country-specific TA, workshop training, and on-line learning. TA will
continue to rely heavily on LTX and STX-missions to individual member countries. Occasionally country
staff may come to PFTAC for TA, and PFTAC staff will generally be available for consultations by email and
video-conferencing. Training will mostly be through focused, sub-regional workshops, which have been
found to be particularly effective for facilitating sharing of country experiences and allowing more
detailed treatment of technical issues than is possible in larger, less homogeneous groups. In some cases a
more comprehensive though less detailed approach is appropriate. In 2017, PFTAC will again team up with
IMF colleagues and other development partners in organizing a region-wide workshop for mid-level
officials, followed by a high level dialogue on related policy issues. Last, but not least, PFTAC will continue
to alert members as to relevant training being made available from the IMF both at the Singapore
Regional Training Institute (STI), where a new training curriculum is being introduced, and through the
IMF on-line courses.
92. PFTAC delivery of TA and training requires coordination and collaboration with development
partners and regional association:
A basic requirement for good coordination and collaboration is good sharing of information. And
although we seek to be transparent, there is always room for improvement. Currently PFTAC
provides regular updates on its recent and planned activities through its Quarterly Report, as well
as through briefings at meetings of development partners. One area where we see room for
strengthening information sharing is through more frequent briefings of development partners by
the resident advisors, either in the field or in post-mission briefings from Suva. This happens
informally, but a more systematic approach may be helpful.
PFTAC already has very good cooperation with development partners in the provision of
workshops. Most of the workshops in which we were involved in FY2016 were in collaboration
with others, and we plan to continue that pattern in FY2017.
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Coordination with regional associations, however, is an area for improvement. Currently, PFTAC
has very productive working relationships with AFSPC, PASAI and PITAA. We would like to see the
same in other areas of our CD. Although PSSC provides a forum for coordination in the area of
statistics, its mandate, which covers all areas of statistics, is perhaps too broad to facilitate close
cooperation in the area of economic statistics. In the PFM area, PFTAC will seek to strengthen its
working relationships with PICPA and PIFMA to be on a par with our cooperation with PASAI.
Lastly, in the area of macroeconomic analysis, PFTAC will explore the scope for establishing a
regional macroeconomic association to facilitate collaboration in this area;
PFTAC will also explore the scope for more effective cooperation with other training bodies,
including the STI, the South East Asian Central Banks Centre (SEACEN), as well as better
integrating on-line training with our own training.
93. In FY2017, further improvements in the RBM framework will be made. Over the past year, the
IMF CD departments have been developing a catalogue of RBM objectives and measurable indicators
which are being incorporated into the logical frameworks being used at PFTAC. In coming months, we will
also begin using software specifically developed to assist with monitoring progress against these
objectives. We also hope to use this framework to assist with setting out CD “programs” in various areas,
along the lines proposed in the PFTAC external evaluation. These will be circulated to the Steering
Committee as they are prepared.
94. On a sectoral basis, planned TA and training activities are described below, and more details are
provided in the FY2017 Logical Framework (Annex V). Nonetheless, some highlights may be noted here:
In PFM, TA will focus on two primary areas:
In FY2017, PFTAC plans to assist with reform road maps in three countries (Kiribati, Nauru,
and Vanuatu). PEFAs are now largely carried out by local officials, with PFTAC playing mainly a
mentoring and quality control role. PFTAC will similarly support the development of PFM
roadmaps aimed at remedying weaknesses identified in PEFAs. Again, local knowledge and
involvement is crucial to success. In view of the release of a revised PEFA framework, PFTAC
will also revise PEFA Self-assessment workbooks and other training materials;
Support and capacity building to members implementing priority PFM reforms. These include
strengthening of: legal frameworks; planning and budget integration; medium-term planning,
budget execution, monitoring, reporting and accountability; budget transparency; and fiscal
risk management.
TA and training in tax administration will focus on three main areas, and include the further
strengthening of the PFTAC/PITAA relationship:
Assisting tax administrations in the region with developing tax compliance risk management
strategies and the necessary capacities to implement those strategies;
Strengthening organization and management of revenue agencies, collection systems, and
core tax functions;
Building capacity to monitor and evaluate the efficiency of tax administration and the impact
of reforms.
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In the area of financial supervision, three programs will dominate the TA and training agenda
during FY2017:
Providing training and mentoring for bank supervision departments conducting on-site
examinations;
Assisting members with establishing modern legal and prudential supervisory frameworks for
credit unions;
Assisting with reforms to provide supervisors with adequate legal powers and the ability to
exercise these; and to identify and advise on changes required to make bank regulation
commensurate with the risk profile of banking systems.
In FY2017, TA and training in statistics will concentrate on:
Providing training courses and on-going support for rebasing of national accounts in 5
members, using HIES data;
Building up capacity in the use of improved methodologies and data sources to compile
national accounts, including the use of tax data;
Assisting four members with completing development of quarterly GDP estimates.
Key priorities for TA and training in the macroeconomic area for FY2017 are:
Continuing to develop integrated macro frameworks tailored to meet the diverse needs of
countries and capacity levels of staff;
Continuing to work with staff on improving the multi-period fiscal planning process with an
emphasis on generating medium-term projections in a coherent manner.
Building the capacity of staff to conduct their own debt sustainability assessments, taking into
account the fiscal implications of natural disasters.
B. Work Program and Budget
95. The PFTAC work program forms part of a much larger exercise at the IMF to plan and budget for
all of its activities in the coming fiscal year—the Resource Allocation Plan (RAP). Within that is a RAP
specifically for capacity development, including TA, and the PFTAC work plan is one element of that. APD
plays a key role in defining the strategic priorities for Fund CD in the region. They engage functional (CD)
departments and country authorities at an early stage in discussions about CD needs and strategic
priorities. The CD departments, responsible for TA delivery by the resident advisors, work in conjunction
with the PFTAC resident advisors, and lead the work plan development, and design. The CD departments
approve and direct the implementation of TA programs delivered by RTAC resident advisors and STX.
PFTAC’s input involves proposing missions largely reflecting discussions between long-term advisors and
country authorities, ensuring that the work plan is properly resourced from within the PFTAC budget and
leading the discussions with the RTAC SC to obtain endorsement of the proposed work program.
96. The FY2017 PFTAC work program is at the drafting stage. At this stage, the proposed work
program largely reflects the input of the resident advisors, based on their discussions with country
authorities, together with the ongoing roll-out of established TA and training programs. Additional input
will be received from APD staff, as well as from the CD departments. We also welcome the input from
PFTAC Annual Report 2016
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country authorities at and following the SC. Indeed, the reason for holding the meeting early in the year is
precisely to gain broad input before the process is finalized in April.
97. The work plan reflects the fact that FY2017 spans Phase IV and Phase V. The work plan for the
first half of FY2017 is constrained by the remaining budget under Phase IV. This will require some scaling
back of activities in order to ensure that PFTAC does not run out of funds before the end of the program,
and has enough funds to handle unforeseeable developments. In the second half of FY2017, the work plan
will operate under Phase V, which is still under discussion. For this period we have assumed that the
strategy proposed in the concept note circulated to members and donor partners is implemented,
including the proposed addition of three resident advisors. Clearly, the work plan will need to be adjusted
to reflect the outcome of discussions on the Phase V program.
98. The FY2017 draft work program envisages a significant increase in activity in the second half of
the year. In the first half of the year, activity will slow somewhat as Phase IV winds down. In the second
half of the year, however, activity is expected to accelerate as the proposed increase in staffing under
Phase V comes into effect. For the year as a whole, the number of mission days in the draft RAP is
projected to rise to 2500 from a little over 2000 in FY2016. The main increases are expected in the areas
where the additional staffing occurs: tax revenue, statistics, and macro-financial analysis. In addition, the
work plan envisages 16 regional and sub-regional workshops during the year.
Fig. 10: PFTAC Work Program: FY2017 vs. FY2014 - FY2016In mission days1/
1/ FY2016 figures based on estimates as of January 20, 2016. FY2017 figures based on draft RAP as of 20 January 2016.
PFM RevenueFinancial Superv'n
StatisticsMacro-econ.
Legal Total
2014 RAP 316 208 57 289 140 1010
2014 Act. 525 319 133 241 150 1368
2015 RAP 444 215 96 328 133 1216
2015 Act. 992 487 178 368 117 2142
2016 RAP 581 475 345 247 110 1758
2016 Est. 539 558 419 304 198 41 2059
2017 RAP 589 780 239 546 344 15 2513
-400
100
600
1100
1600
2100
2600
Mis
sio
n d
ays
PFTAC Annual Report 2016
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99. The draft work program of missions in
FY2017 has been used together with our
information on costs of different missions to
estimate budget expenditure projection for
FY2017. Overall expenditure is projected at US$ 6.8
million, as shown in Table 3. Although estimates for
CD activity in the RAP generally under-estimate the
activity undertaken and, therefore, the costs, this
may not be true in FY2017. The main reasons are,
first, that the budget in the first half of the year is
tightly constrained; and, second, that the estimates
make no allowance for delays in filling new
positions or for re-staffing of existing positions.
Such delays would lead to fewer missions and
lower costs.
C. Sectoral Work Plans in FY2017
Public Financial Management
100. In FY2017, the three key objectives will be to assist members to:
Improve planning and prioritization of PFM reforms based on the results of PEFA assessments,
development of PFM reform roadmaps; and support for strengthening of legal frameworks;
Strengthen integration of budgeting and planning, preparation of medium-term expenditure
forecasts, increase budget transparency, and improve debt, asset, and risk management;
Strengthen budget execution, monitoring, reporting and accountability.
101. Training will be delivered in a variety of forms including:
Regional or sub-regional workshops by PFTAC experts, IMF HQ staff, and experts from other
development partners;
Regional or country-specific training jointly sponsored by PFTAC and regional partners like PICPA,
PASAI, SPC, or PIFS;
Country specific training on topics mutually agreed with country officials.
102. Key objectives and milestones are outlined in Box 9:
Table 3: PFTAC FY2016 & FY2017 Budget Projection1/
(US$ millions)
Expenditure areas
FY2015 Outcome
FY2016 Estimate
FY2017 Projection
Advisor salaries 1.98 2.03 2.59
STX mission costs 1.75 1.60 1.83
Travel 0.58 0.46 0.56
Workshops & Training 0.70 0.59 0.67
HQ missions & backstopping 0.50 0.38 0.52
Evaluation & SC 0.28 0.10 0.13
Misc. 0.04 0.04 0.06
Subtotal 5.83 5.20 6.37
Trust Fund management fee 0.41 0.36 0.45
Total 6.23 5.56 6.82
1/ Based on PFTAC data.
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Box 9: PFM Objectives and Milestones in FY20179
Objectives Major Milestones
Improved planning and
prioritization of PFM reforms,
including through PEFA
assessments, development of PFM
reform roadmaps; and support for
strengthening of legal frameworks
At least 1 PEFA assessment conducted in each PFTAC country during the
funding cycle with significant country staff involvement and ownership.
Priority Reform road maps developed with significant involvement and
ownership by country officials following each PEFA assessment, including
support to high-level dialogue.
Governments approve changes to legal frameworks or financial instructions in
order to achieve PFM systems are aligned with recognized good international
practices.
Strengthened integration of
budgeting and planning;
preparations of medium-term
expenditure forecasts, increased
budget transparency; and
strengthened debt, asset, and risk
management
Budgeting becomes more comprehensive, transparent, policy-based,
integrated with planning and with a medium-term orientation, timely, and
reliable, in accordance with international standards.
NTR policies, rates and collections are regularly reviewed as part of the annual
budget process.
A clear fiscal oversight framework for AGAs and SOEs is significantly
implemented according to international standards
Financing is adequate to meet pension or social security benefit promises and
is sustainable in the long-run.
Public investment and capital asset management is developed according to
international standards.
Strengthened budget execution,
monitoring, reporting and
accountability
Budget execution controls are improved according to international standards.
Cash management is improved according to international standards.
Internal Audit is operational covering major central government entities, and generally meets international standards.
Accounting, fiscal monitoring, and reporting is improved according to international standards.
Improved planning and prioritizing PFM reforms, including through PEFA assessments,
assistance with development of PFM reform roadmaps
103. This TA program aims at developing the capacity of countries in systematically planning PFM
reforms by identifying priority issues and consolidating and sequencing reform activities to a manageable
level within the country’s capacity. If changes in the legal framework are needed to achieve these, those
are considered for implementation either through changes to PFM framework laws or Financial
Instructions/Regulations. Anticipated activities in FY2017 include:
No PEFAs are currently scheduled for FY2017. The revised PEFA Framework was just recently
released in early February 2016. During FY2017 PFTAC’s LTX Advisors will revise Self-Assessment
Workbooks and other training materials. Work on PEFAs will commence in FY2018 with regional
workshops on the new framework for MOFs and Audit Offices;
9 The PFM logical framework for the FY2017 will be revised in the Phase V program document to reflect a set of RBM
objectives, outcomes and measurable indicators that the Fund has established and agreed to.
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Support to Kiribati, Nauru, and Vanuatu is planned for development of PFM Reform Roadmaps.
PEFA Self-assessments for those three countries either were completed in FY2016 or are planned
for FY2017;
TA has been budgeted to assist Fiji and Solomon Islands revise their Financial Instructions. A desk
review of existing PIC PFM laws is also planned to identify provisions that could be obstacles to
implementation of disciplined PFM, and preventing implementation through modifications to
country Financial Instructions. The review will highlight changes that are essential and identify
those that might be "nice" but not essential because current law allows implementation through
Financial Instruction changes.
Strengthened integration of budgeting and planning, preparation of medium-term expenditure
forecasts, increased budget transparency, and improved debt, asset, and risk management
104. This TA program aims at developing the capacity of countries in improving the policy and
medium-term orientation of the budget, as well as managing assets, debt, and other fiscal risks. The
milestones for envisioned reforms include:
Budgeting becomes more comprehensive, transparent, policy-based, integrated with planning
and with a medium-term orientation, timely, and reliable: The revised PEFA framework released
in February 2016 includes a strengthening of the indicators for policy-based medium-term
expenditure budgeting, and new indicators assessing the credibility of fiscal strategy, revenue
budgeting, asset management, and performance measurement. These changes were made
because of increasing international recognition that effective medium-term frameworks are
essential to:
Implementing quality spending for those essential public services that by their nature require
longer implementation time-frames for reaching maturity, and
Addressing medium- and long-term risks to macroeconomic and financial stability and
development.
PFTAC's planned FY2017 work in this area includes TA to Fiji to continue making improvements in
the program/activity level narrative in their annual budget document. Fiji made a major change in
its budget documentation starting with the 2015 budget and sustained those changes in the 2016
budget. Regional workshops on Expenditure Forecasting/Budget Documentation are also planned,
further developing topics introduced during successful workshops in FY2016. PFTAC’s basic
approach for further developing medium-term fiscal planning in terms of major milestones
suggested for country partners is summarized in Box 10.
Box 10: Medium-term Fiscal Planning Development Milestones
PFTAC’s approach to assisting PICs develop a medium-term orientation will be organized around the following
milestones:
A fiscal note process is in place for Cabinets and applies to all new policy or project proposals funded by any source (including donor partners)
Budget department develops and maintains a system for managing information on current and out-year costs for all services and projects, clearly distinguishing between policies/projects already approved, highly likely new policies/projects, demographic changes, and crucial fiscal space reserves to manage various risks.
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Box 10: Medium-term Fiscal Planning Development Milestones
Budget department prepares regular reports for the Finance Minister, Cabinet, and Parliament on the out-year (at least Y+3) surpluses or deficits implied by past Cabinet actions, highly likely future Cabinet actions, other cost drivers such as demographic flows, and important reserve accounts for managing fiscal risks.
Finance ministry uses this information to assist Cabinets in setting annual and medium-term spending ceilings within estimates of available resources
Budget department uses the information to assist in preparing budget narrative on medium-term strategy, medium-term estimates in annual budgets, and narrative in budgets on future issues.
Budget documents become more policy and performance focused for major public services within a medium-term framework. Over time these would incorporate the important visionary and substantive planning information now contained in disparate and poorly integrated separate documents like National Development Strategies, Corporate Plans, Annual Plans, and Sector Strategies.
NTR Management implemented according to international best practices: CD in this area will be
to assist governments in improving transparency of the policies and processes for non-tax
revenue management, and to enhance skills in reviewing budget estimates and proposals for new
or revised fees/rates. Priority will be for countries that started efforts and/or indicated interest in
FY2016, particularly Fiji, Solomon Islands and Vanuatu.
Debt, asset, and risks management: Strengthening these functions is in support of implementing
a medium-term budgeting system. Key elements include:
Financing is adequate to meet pension or social security benefits and is sustainable in the
long-run. Article IV reviews have highlighted the challenges that will be faced by some PICs in
financing the social security benefits obligations that have been taken. The PICs facing the
biggest challenges include FSM, Palau and RMI. The difficulties that will face these social
security systems are functions of a variety of factors including inadequate contribution levels,
failure to enforce employer/employee contribution requirements, costly early retirement
provisions, and loop-holes related to beneficiary designation. In Phase IV PFTAC, in
cooperation with the IMF's Expenditure Policy Division, worked with RMI to develop an option
to improve fund sustainability. The option involved phase-in of a revised benefit formula for
future retirees and changes in the government's contributions to the fund. In FSM PFTAC
assisted with the design of legislation for a supplemental defined contribution retirement plan
for government employees. A sub-regional workshop is planned in late FY2016 for FSM, Palau
and RMI to continue discussing these critical issues. While no specific additional pension work
is currently scheduled for FY2017, additional requests are anticipated during PFTAC's Phase V.
Public investment and asset management is developed according to international
standards. TA in this area will focus on developing the capacity of countries to meet the
criteria on public investment and asset management as suggested in the 2016 revised PEFA
Framework (PI-11 and 12). This TA will be integrated with the TA program on budgeting,
accounting and reporting. More specific seminars and TA on other aspects of public
investment and asset management will be planned starting in FY2018.
A clear fiscal oversight framework for autonomous government agencies (AGAs), SOEs, and
sub-national governments (SNGs) is significantly implemented according to international
PFTAC Annual Report 2016
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standards. The focus of TA is to offer recommendations to improve the frameworks and
mechanisms for fiscal oversight on AGAs, SOEs and SNGs, as well as develop the capacity to
identify, assess, manage, monitor, and report key fiscal risks from these entities. Sound fiscal
oversight requires mainstreaming this function into the budget management, debt
management, fiscal monitoring and reporting processes of the central government, and at the
same time improving the performance of individual entities. In FY2016 initial TA was provided
to Samoa to improve its SOE oversight strategy. A sub-regional seminar is planned in FY2017
to promote good practices and enhance knowledge and skills in this area. In addition, TA is
planned for the development of a framework to assess the amount and likelihood of fiscal
risks arising from transactions between the central government and SOEs in Fiji and Samoa.
Strengthening budget execution, monitoring, reporting and accountability
105. This TA program aims at improving budget execution controls and internal monitoring to
strengthen risk management, while at the same time enhancing the reliability, timeliness, transparency
and relevance of fiscal reporting, in order to evaluate fiscal outcomes, and strengthen accountability.
FY2017 efforts will emphasize the following four major areas:
Budget execution controls are improved according to international standards: Weaknesses of
budget execution controls, if not resolved, will lead to budget overruns - bigger deficits and
arrears in the future. Sound budget execution controls require effective commitment control,
payroll control, virements control, monitoring of arrears, and other internal control procedures.
PFTAC TA will conduct assessments of internal controls and provide recommendations to address
the gaps. The results of the internal control assessments can be useful in enhancing the financial
regulations and process flows on budget execution, as well as designing IFMIS specifications, and
internal audit strategy. FY2017 activity in this area is currently planned for RMI.
Cash management is improved according to international standards: PFTAC TA will focus on
developing a Treasury Single Account or an equivalent cash consolidation system, improving
methods of cash forecasting and cash flow analysis, and improving government banking
frameworks. These capacities are expected to sustain cash buffers that would cover shortfalls,
natural disasters, and other contingencies in the short term, and building up reserves for future
loan repayments, replacement of capital assets, and other contingencies. In FY2016 TA was
provided to PNG and Samoa that led to governments’ adoption of an improved cash management
strategy, and its initial implementation. Follow-up TA for FY2017 is planned for PNG and Samoa,
and for the Solomon Islands to review and improve its existing strategy.
Internal Audit is operational covering major central government entities, and generally meets
international standards: The focus of the TA is to improve institutional capacity in developing,
managing and implementing a medium-term audit strategy framework based on an analysis of
fiscal risks particularly on key issues such as on payroll, procurement, capital works, grants and
subsidies. FY2016 TA was focused on Vanuatu and this led to improvement of internal audit
performance in the 2015 PEFA Self-assessment. This TA will continue in FY2017 to support
implementation of internal audit reforms in Vanuatu
Accounting and fiscal reporting are improved according to international standards: PFTAC TA
will focus on assisting countries in planning and implementing government accounting reform
such as in prioritizing and sequencing of reform strategies, and drafting of priority accounting
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policies and procedures consistent with IPSAS. On fiscal reporting, TA will focus on improving the
reliability, relevance, and transparency of fiscal reporting frameworks according to international
standards.10 TA will be provided to countries that are expected to continue accounting and
reporting reforms during FY2017 such as Fiji, PNG, Samoa, and Tonga. PASAI and PFTAC will
continue to promote a closer partnership among accountants and auditors in the region. In
FY2017 a second batch of a joint accounting and auditing reform workshop will be conducted.
Likewise, a workshop focusing on enhancing Chart-of-Accounts is planned in FY2017.
106. In addition, work on IFMIS upgrading is expected in Tonga, Kiribati, and Cook Islands. TA on
IFMIS will consist of technical support in the conceptual design and specifications of the system, and in
review of the initial operations. This reform will be coordinated with reforms on budget formulation,
execution, accounting, and reporting.
107. The indicators used in the RBM framework for monitoring progress towards the PFM objectives
have been further modified. In our assessment, the indicators that had been set previously were
insufficiently nuanced to reflect progress in different aspects of PFM reform in any given country, and also
insufficiently graduated to capture incremental progress. In the revised RBM logical framework for PFM,
the indicators are now more clearly aligned with the major groupings of PFM objectives in the PEFA
framework (see Annex V). More comprehensive information about PIC PEFA ratings will be presented in
each annual report showing progress, and identifying PFM strengths and weaknesses. In our view, not
only are these superior to the previous indicators, but also are better aligned to our assessment of
performance with the implementation of PEFA reforms. The PFM logical framework for the FY2017 will be
further revised and a new logframe following the RBM structure that the Fund has agreed to will be
presented in the program document.
108. PFTAC will also continue a partnership with PICPA at the USP to train more PFM professionals in
the region. With satellite campuses in 12 countries and sophisticated 2-way video distance learning and
other technology, USP has great potential to regularly train much larger numbers of PFM professionals
(both in Finance Ministries and line ministries) than traditional and more expensive approaches to training
(out-of-country workshops or flown-in experts). Training expected to be emphasized in the near future
includes Procurement, Skills for Budget Analysts, Accounting, and Internal Controls.
Revenue Administration
109. The FY2016 PFTAC strategy focused on reviewing the “current state” in PIC revenue
administrations and building reform plans with the authorities to strengthen revenue administration.
These plans provide a strong foundation for the FY2017 work plan.
110. PFTAC’s FY2017 work plan will continue to be guided by the view that a major goal of any tax
administration is to promote voluntary compliance. As in many developing administrations, PICs have
lacked an understanding of modern compliance management concepts and are now recognizing that
achieving a proper balance between service to the taxpayer and enforcement of the laws is important in
10
These international reporting standards include to the PEFA Framework on Accounting and Reporting,
IMF Fiscal Transparency Code, and GFS Manual.
PFTAC Annual Report 2016
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promoting voluntary compliance. PFTAC invested heavily in changing this mindset which has resulted in a
number of countries changing their business models to facilitate this change in direction.
111. FAD’s new RBM framework, defined across three high level categories will guide delivery of
PFTAC’s FY2017 technical assistance. These are to assist members to strengthen:
Revenue Administration Management and Governance arrangements;
Core Tax Administration functions;
Core Customs Administration functions.
112. Key outcomes relating to these objectives are summarized in Box 11. Although strengthening
revenue administration management and governance will receive some attention, the largest proportion
of TA will focus on improving core tax functions, an important and urgent priority currently facing PICs.
Strengthening customs administration will fall under the auspices of the Oceania Customs Organization
(OCO) which remains the primary vehicle supporting PIC’s in the implementation of their customs reform
programs.
Box 11: RBM Framework for Revenue Administration: Key objectives and outcomes
Strengthen Revenue Administration Management and Governance arrangements
Reform strategy and implementation governance framework adopted and institutionalized.
Organizational arrangements enable more effective delivery of strategy and reforms.
Support functions enable more effective delivery of strategy and reforms.
Transparency and accountability more effectively supported by independent external oversight and
internal controls.
Corporate priorities and compliance better managed through effective risk management.
Tax/customs administrative procedures legally established.
More independent, accessible, effective and timely dispute resolution mechanisms adopted.
Strengthen core Tax Administration Functions
Integrity of the registered taxpayer base strengthened.
Taxpayer services initiatives to support voluntary compliance strengthened.
More taxpayers meet their filing obligations as required by law.
More taxpayers meet their payment obligations as required by law.
Audit and other verification programs more effectively ensure completeness and accuracy of
reporting.
Strengthen Core Customs Administration Functions.
Trade facilitation and service initiatives support voluntary compliance.
Foreign trade operators meet their reporting and payment obligations.
Customs control during the clearance process more effectively ensures accuracy of declarations.
Audit and anti-smuggling programs more effectively ensure enforcement of customs laws.
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Strengthening Revenue Administration Management and Governance Arrangements
113. Strategic and operational planning are important management tools that are being used to
guide the deployment of resources and provide focus on key activities and measurements for achieving
the vision of PICS. PFTAC will continue to assist those PICs who have taken steps to implement new
strategic plans, operational plans, and new roles and job descriptions to ensure proper implementation
and sustainability. Key elements of CD will involve:
Reform Strategy and Governance: Experience shows that although there is potential for reform
progress is often hampered by poor governance frameworks and inexperience in setting up a
modernization project management structure. PFTAC, during FY2017, will continue to assist PICs
in this area.
Organizational Arrangements: FY2016 has seen good progress with PICs moving towards
functional structures. In some cases, reflecting different environments, consideration is given to a
hybrid approach where a focus on large, medium and small taxpayers segments is maintained and
the more functional approach is employed for registration, processing and payments.
Nevertheless, more assistance is required in this area to ensure that the benefits of a functional
structure with segmentation for certain types of taxpayers are achieved.
Support functions: To strengthen revenue administration support functions also need to be
considered e.g. information technology (IT), human resources and legal functions. Most countries
have some form of IT at the moment but for those that do not PFTAC will continue to provide
assistance with IT strategic planning11. PFTAC will also help PICS identify new skills and
competencies needed to implement other modern tax administration practices.
Oversight: PFTAC will work with PICs to improve transparency and accountability by helping tax
administrations to develop, implement, monitor and maintain performance measurement and
management frameworks. Assistance in this area will help provide benchmarks for measurement
of performance improvements. The RAFIT is providing a valuable tool in institutionalizing this
discipline with more PICs understanding the value and importance of capturing this information.
Risk management: A key PFTAC focus during FY2017 will be the continuation of technical
assistance directed towards improving voluntary compliance through enhanced risk management
and the implementation of compliance improvement strategies. This approach, already adopted
by a number of PICs, will take time to fully implement and assist in mitigating major compliance
risks. PFTAC technical assistance will provide guidance on how to develop a compliance strategy
through identifying, assessing, and prioritizing major risks and then determining treatment
actions. Efforts would aim to achieve wide impact within the taxpayer population by
understanding the reasons for non-compliance and then positively influencing taxpayer behaviors,
using whatever treatment option that can best achieve taxpayer compliance.
Administration Procedures: Most countries have administration procedures legally established
through a Revenue Administration Act. For those North Pacific member countries who are
considering comprehensive policy reform, a Revenue Administration Act will form part of the
package and PFTAC will provide guidance on the administration provisions.
11 Funding for implementation will not be provided through PFTAC.
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Strengthening Core Tax Administration Functions
114. Technical assistance in FY2017 will continue to assist PICs in developing their core revenue
administration functions which are centered on the implementation and enforcement of tax legislation
and regulations. These activities include identification and registration of taxpayers, processing of tax
returns and third party information, examination of the completeness and correctness of tax returns,
assessment of obligations, collection of taxes, and provision of services to taxpayers.
Registration: For various reasons a number of PICs in the region have neglected keeping their
registration data bases up to date resulting in inaccuracies which impact on the delivery of
effective compliance programs. PFTAC FY2017 technical assistance will continue to highlight the
importance of tax administrations compiling and maintaining an accurate and reliable register and
focused activities to ensure taxpayers are registered if they are liable to be registered.
Taxpayer Services: To promote voluntary compliance and public confidence in the tax system
PFTAC will continue assisting PIC’s shift towards adopting a service orientated attitude towards
taxpayers, ensuring that taxpayers have the information and support they need to meet their
obligations under the law. Generally tax administrations have been weak in this area with a fuller
understanding of this persuasive function in tax administration only now emerging.
On-time filing and payment: On-time filing and payment, a key foundation of good tax
administration is lacking in many PICs and although some ground has been made to improve
performance in these areas more needs to be done. PFTAC FY2017 TA will focus on assisting PICs
develop their strategies, processes and filing enforcement capacity to achieve higher rates of
compliance in these areas.
Verification: The audit function plays a vital role in tax administration and represents a core and
essential function that, with suitably qualified staff, has the potential to identify under-declared
tax liabilities. The amount of additional revenue raised obviously depends not only on the level of
compliance within the taxpayer community, but also on the effectiveness of the inspectors and
audit program planning and implementation. TA in FY2017 will assist PICs build capacity in this
area which was identified as a weakness in the training needs analysis conducted across PICs in
2014.
Strengthen Core Customs Administration Functions
115. The OCO, based in Suva, Fiji remains the primary vehicle supporting PICs in the implementation
of their customs reform programs. However, PFTAC will continue to support the development of
integrated corporate strategies and risk based compliance improvement strategies for those countries
that have combined tax and customs offices.
PFTAC’s Revenue Administration CD plan FY2017
116. PFTAC’s CD strategy for revenue administration during FY2016, which saw a shift from tax policy
and legislation drafting assistance to strengthening core tax administration functions, signifies the start
of a technical assistance program that will run beyond FY2017. Most PIC tax administrations accept that
they face a number of challenges moving ahead and that TA will be needed to facilitate the transition to
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more modern tax administration. Box 12 provides a high level overview of the focus of TA and member
countries FY2017.
Box 12: Focus of PFTAC Revenue Administration Technical Assistance Plan FY2017
RBM Objective RBM Description Country
Strengthen Revenue
Administration and
Governance
arrangements
1.1 Reform strategy and implementation governance
framework adopted and institutionalized.
Fiji, FSM, Kiribati, Nauru,
Palau, RMI, Samoa,
Tonga, Tuvalu and
Vanuatu.
1.2 Organizational arrangements enable more effective delivery
of strategy and reforms.
1.3 Support functions enable more effective delivery of strategy
and reform.
1.4 Transparency and accountability more effectively supported
by independent external oversight and internal controls.
1.5 Corporate priorities and compliance better managed
through effective risk management.
1.6 Tax/Customs administrative procedures legally established.
1.7 More independent, accessible, effective and timely dispute
resolution mechanisms adopted. 12
Strengthen Core Tax
Administration
functions
2.1 Integrity of the registered taxpayer base strengthened.
Cook Islands, Fiji, FSM,
Kiribati, Nauru, Palau,
RMI, Samoa, Tonga,
Tuvalu and Vanuatu.
2.2 Taxpayer services initiatives to support voluntary
compliance strengthened.
2.3 Larger proportions of taxpayers meet their filing obligations
as required by law.
2.4 Larger proportions of taxpayers meet their payment
obligations as required by law.
2.5 Audit and other verification programs more effectively
ensure completeness and accuracy of reporting.
Strengthen Core
Customs
Administration
functions.
3.1 To be dealt with under the umbrella of the Oceania
Customs Organization with PFTAC assisting in the development
of corporate strategies and compliance plans.
Fiji, Samoa, Tonga and
Vanuatu.
Regional Activities
117. Over the last year, PITAA has taken its biggest steps towards independence by appointing staff
to an interim secretariat, formalizing the constitution and collecting annual subscriptions from
members. PFTAC has played a valuable role in supporting PITAA’s strategic development, funding training
programs and conferences, and facilitating regional knowledge sharing from which most PICs have
benefited. This relationship will be built upon during FY2017 where training and capacity building will be
continued with an added dimension of facilitating the development of PITAA’s strategic direction and
12 Disputes Resolution: An effective and independent disputes resolution process is a fundamental feature of a good
tax administration system. Many PIC tax administrations do not meet good international practice in their dispute
resolution processes, however PFFTAC considers that a high priority is to get the core functions operating effectively
first. To the extent that any TA is provided in disputes resolution it is expected that it will be at a later stage of the
program.
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business plan for the next five years. This will include: (a) defining more concisely the role that PITAA will
play in stimulating regional cooperation and capacity building; (b) the development of regional training
material and trainers to deliver the training;13 (c) the development of a TADAT type tool that could be
used specifically to assist the smaller and less developed tax administrations identify and design plans to
improve tax administration performance; (d) a regional initiative to promote the use of data to improve
overall tax administration; (e) whether an internship program could be developed to assist the less
developed tax administrations develop expertise from their larger and more developed counterparts; (f)
regional approaches to deal with high risk sectors and the cash economy; and (g) assist PICs in the design
of Taxpayer Satisfaction Surveys. Box 13 provides an overview of anticipated PFTAC training initiatives
during FY2017.
Box 13: Anticipated PFTAC/PITAA FY2017 Seminars and Workshops
Strengthening the audit function;
Indirect audit methods;
Developing an on-time filing and on-time payment strategy;
Developing a taxpayer services and communication strategy;
Strengthening VAT management;
Developing a strategy to deal with large taxpayers;
Improving compliance in the construction industry; and
Developing a cash economy strategy.
Financial Sector Supervision
118. In FY2017, PFTAC Technical assistance will focus on strengthening financial sector supervision by
focusing its activities on building the on-site banking examination capacity of supervisors and
establishing modern oversight credit union frameworks. Owing to the diverse nature of PFTAC
membership, ranging from jurisdictions requiring targeted support, such as consolidated supervision,
against those where basic development of supervisory capabilities are more appropriate, country specific
objectives will be built into the program.
119. The program to strengthen on-site examinations will remain a top priority. Last year PCTAC
moved from providing theoretical workshops on examination concepts to the practical application of
lessons learned with the introduction of a comprehensive on-site examination program which will
continue this year. The focus will be on establishing adequate examination preparedness, scoping and
planning followed by supporting the actual examination and the drafting of the final report. Participating
central bank supervisors will develop annual examination programs that will result in the execution of at
least two examinations in each jurisdiction during the year. (RBM 3.)
13 PFTAC has commenced a Train-of-Trainer program which has resulted in PIC staff co-presenting at seminars and
workshops.
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120. PFTAC on-site examination program will be supplemented with the use of STX with expertise in
on-site examination to provide long-term support to bank supervisors in planning, scoping and executing a
number of on-site examinations, including attending the actual examination. The STX would not act as
examiners but, as mentors, providing guidance and direction. The STX will also assist with drafting a final
examination report and deliver short workshops on subjects relevant to the topic at hand. Over the year
the expert could provide support for one or two on-site examinations, as well as, interim consulting on
related issues. The program is intended to provide the support required by supervisors to eventually plan
and execute on-site examinations of banks on their own accord.
121. PFTAC will work with the bank supervisors to ensure that examinations are conducted in
accordance with sound business and financial principles with the introduction of concepts related to Risk
Based Banking Supervision. As regulatory entities perfect their on-site examination skills they will be
offered the opportunity to graduate to more advanced concepts with PFTAC offering technical workshops
on advanced topics such as consolidated supervision and targeted sectors like insurance and pensions.
122. To increase the sustainability of technical assistance there will be greater focus on developing or
ensuring that the authorities have up to date documentation, such as examination manual and
supervisory guidance notes for use in training new staff and codifying standard procedures. The
examination program will ensure that each mission will produce recommendations as to improvements to
current practices and where warranted changes will be introduced.
123. The Credit Union Reform Program is moving forward following its introductory workshop in
Guam in 2014 (RBM objective 3.9). A number of countries have since received technical assistance in
drafting laws and building oversight capacity, as well as, implementing a credit union financial reporting
program. The program will evolve this year with three main components:
Modernizing legal frameworks for operation and supervision of credit unions. This popular
program includes a review of current legislation, and recommendations for amendments or
drafting of new legislation was implemented in Fiji, Micronesia, Palau, Samoa, Solomon Islands,
Timor-Leste, Tonga, and Vanuatu and last year. PFTAC will build on those workshops this year to
support the actual legislative process to ensure each and every jurisdiction proceeds with the
adoption of a new Credit Union Act. Advisory support will include drafting Regulations, Guidelines
and Bylaws as required. The IMF Legal department will be managing this component with the
assistance from the PFTAC Advisor.
Credit Union capacity building. PFTAC will provide support to Supervisors who will be tasked with
ensuring credit unions are adequately prepared to comply with the requirements that will be
outlined in a new more modern legislation. This will include holding workshops to introduce
standard financial statements and statutory reporting templates that will be designed to be
compliant with the requirements of international standards.
Credit union oversight. PFTAC will ensure that each Central Bank participating in this program will
be provided with sufficient training to be able to adequately supervise credit unions operating
within its oversight authority. This will include training the supervisor and his/her staff on how to
adequately perform the off-site supervision and on-site examination of this sector.
124. With the assistance of the IMF Legal Department, PFTAC will provide support for reforms to
provide supervisors with adequate legal powers and the ability to exercise them. The objective is to
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strengthen financial stability and promote better access to finance. Where appropriate, PFTAC will be
ready to identify and advise on reforms needed to make bank regulation commensurate with the risk
profile of banking systems.
125. The FY2017 work program will also include continued PFTAC financial sector outreach. This will
include acting as Secretariat for the AFSPC annual meeting, hosted by the Financial Institution Commission
of Palau in June, including the delivery of a thematic workshop on financial sector resilience to, and
preparedness for, natural disasters, a subject of interest to regional supervisors. We will also continue to
support the annual Governors’ annual meeting.
Macroeconomic Statistics
126. PFTAC will continue to assist member countries in compiling and improving national accounts
statistics with a focus on rebasing constant price estimates, developing quarterly measures of GDP, and
improving existing methodologies. These key objectives align with the RBM framework that was designed
to better monitor statistical support provided in the Pacific region. PFTAC also developed detailed
milestones to harmonize progress monitoring across countries against each RBM objective. These
objectives and related milestones are shown in the RBM framework tables in Annex V. In addition, we will
increase the level of assistance provided in GFS to complete the work begun by the Japanese-supported
IMF project on GFS, which closed in late 2015.
127. Regular rebases of constant price GDP estimates (RBM objective 4.2) are essential to maintain
an accurate measure of the economy as new activities develop and relative prices change. PFTAC
recommends rebasing national accounts statistics in constant prices at least every ten years. During
FY2017 this will be undertaken in several countries in the region including the Cook Islands, Fiji, the
Solomon Islands, and Vanuatu, and additional rebasing plans should start in a number of other countries
where the base year is approaching ten years old. This work will enable most countries to keep rating high
against the milestones for this RBM objective. Significant methodological changes are often kept on hold
and introduced while rebasing due to the consequential revisions of estimates. In addition, rebases are
also the opportunity to incorporate new data sources such as household or business surveys. These
developments require extensive external TA and need to be carefully planned in advance. PFTAC will
continue to provide bilateral TA with rebasing, as well as regional workshops.
128. Developing a quarterly measure of GDP is another area of development for countries where
data sources enable the compilation of more frequent estimates (RBM objective 4.3). The compilation
of quarterly GDP estimates enables a better short-term tracking of the state of the economy leading to
improved and timelier decision making. This has been a particular focus of IMF and PFTAC TA in recent
years. Currently three countries, the Cook Islands, Fiji, and Samoa regularly compile quarterly estimates of
GDP or are in the process of doing so. Progress against this RBM objective should enable the last
milestone against this RBM objective to be reached in the coming years with at least four Pacific countries
compiling these estimates.
129. Another key area of assistance remains the improvement of methodologies and data sources
(RBM objective 4.5) in all countries. This involves improving the coverage, quality and timeliness of
national accounts statistics. GDP is the key indicator used to measure economic performance and the bi-
lateral TA and workshops provided by PFTAC focus on its continuous enhancement. This is a central aspect
of the TA provided by PFTAC and recognized by users of the statistics but not always visible and often
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difficult to quantify. Progress against this RBM objective has been strong but data quality in a number of
countries is still insufficient to reach the last milestone and have good quality national accounts statistics
published regularly. PFTAC will continue to promote the use of administrative data and particularly tax
data where relevant as they provide a comprehensive and cost-effective source of information for the
compilation of national accounts estimates.
130. Capacity supplementation is also provided by PFTAC in small countries without the critical mass
to have enough staff members dedicated to the compilation of national accounts statistics. The support
provided by PFTAC enables the regular compilation and publication of national accounts statistics (RBM
objective 4.7) in statistical offices where resources are insufficient and the expertise required to compile
national accounts cannot be developed locally. Even in these countries it is important to involve local staff
as much as possible and to ensure that methodologies are well documented to ensure clarity and
continuity.
131. The other objectives included in the RBM framework will also continue to be pursued. Price
statistics are a key component for the compilation of national accounts statistics and PFTAC supports
improvements in this area (RBM objective 4.8). Coordination with index compilers is important because of
the need for consistency across economic statistics (RBM objective 4.6) an example being the close
correlation between consumer price index weights and household final consumption expenditure
estimates. Prices are the primary responsibility of the SPC, which filled its vacant price statistician post in
2015. The ABS also provides prices support in some PICs; the present regional coordination will be
continued in this area.
132. PFTAC’s provision of TA including training in macroeconomic statistics will continue to be
coordinated with development partners within the framework of the TYPSS Phase II (2015–2017). The
PSSC oversees the implementation of the TYPSS. PFTAC will continue coordination within PSSC and
provide input to the working groups as required. The present collaboration with the resident and
peripatetic long-term economic statistics advisors in the FSM, Palau, RMI, the Solomon Islands, and Timor-
Leste will continue, as will the close coordination with the economic statisticians at the SPC in the areas of
macroeconomic statistics, surveys and administrative data, and international trade statistics.
133. PFTAC will expand its provision of GFS TA in FY2017 in line with the Phase V strategy in which an
additional LTX will be employed to provide capacity development in GFS. Now that the IMF GFS and ESS
projects funded by the Government of Japan have been completed there is a demonstrated need for
further support in these areas. These two projects both significantly contributed to improving the
accuracy, availability, comparability, and timeliness of their statistics through country-specific TA and
regional training workshops for the region. This work will be continued into FY2017 primarily for GFS but
with ESS support provided to two or three countries using an STX.
134. Several sub-regional training courses will be held during FY2017 to meet local needs. This
approach, initiated a few years ago, allows a better focus on specific issues faced in countries with similar
statistical skills and development needs while targeting small groups of compilers. Following past
successes and ongoing demand, sub-regional courses will continue to be conducted for countries from the
Northern Pacific (FSM, Palau, and RMI) and Melanesia (PNG, the Solomon Islands, and Vanuatu)
depending on topics. Country-specific TA will still represent most of PFTAC’s support with advisory in-
country missions and remote support.
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135. With support from statisticians from the region, PFTAC intends to engage further with
macroeconomic statisticians from the region through the PINACLE association, to assist in developing
the capacity, expertise and infrastructures for the production and dissemination of high quality national
accounts statistics in the region. Technical papers prepared on specific national accounts topics are
available on the PINACLE Internet site: http://pinacle.pftac.org/page/Training/National/.
Macroeconomic Analysis and Forecasting
136. Technical assistance and training will continue to focus on incorporating medium-term trends
and risks into forecasting and policy analysis. Strengthening macroeconomic policy formulation will
remain the principal objective of the program. The program will continue to include monetary and fiscal
policy. A second macroeconomic advisor from the second half of FY2017, which marks the first six months
of the Phase V program, would focus on macro-prudential policy to assist members establish tools and
processes for monitoring and enhancing macroeconomic and financial stability. The program will seek to
achieve three main outcomes: (i) enhanced monitoring, forecasting and policy analysis tools; (ii)
strengthened capacity to develop sustainable policies, and (iii) strengthened capacity to build greater
resilience to shocks. The addition of a second macroeconomic advisor will be particularly helpful in
increasing PFTAC’s ability to provide macroeconomic TA to fragile states in the region which, in several
cases, need capacity supplementation.
137. Financial programming, which is a useful empirical tool for the analysis of economic
developments, will continue to be used and enhanced to strengthen capacity for monitoring,
forecasting and policy analysis. A key advantage of FP frameworks is that they are flexible—they can be
adapted and modified to users’ needs. In developing FP frameworks the strategy has been to start simple
with a basic framework that is build around the key macroeconomic data sources and the main linkages in
an economy. As economies evolve over time, more data become available and staff capacity in empirical
modeling expands, the basic framework is then gradually developed further.
138. The main development of a financial programming framework will be completed in FY2017 in a
number of countries. As a result, PFTAC TA will shift from assistance with constructing frameworks to
supporting staff to embed the new tools into work processes and applying them in empirical analysis. The
focus is on learning by doing as it is an effective way for users to familiarize themselves with a new tool
and identify aspects of the tool that should be improved. Having a sound understanding of the
macroeconomic and fiscal linkages and the channels in a framework is crucial because FP frameworks are
a simple tool that from time to time will need to be modified and augmented by users to analyze a
particular shock or policy scenario, for instance, to evaluate the fiscal and economic impacts of particular
climate change policies or strategies. The development of a FP framework is therefore an investment that
requires maintenance and updating. It also requires the management of risks, such as staff departures
and staff absences.
139. TA will assist countries in modifying and adapting FP frameworks for policy analysis, as well as
developing methodology to forecast key economic variables that underlie the framework. All countries’
financial programming frameworks, while having a basic structure consistent with the FP framework used
by the IMF to analyze macroeconomic developments, have unique features and characteristics. To
support regional sharing of knowledge, experiences, resources, and best practices, PFTAC will facilitate a
workshop on using financial programming frameworks for policy analysis. Another objective will be to
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encourage the collaboration between institutions in the region on common issues. A workshop on
forecasting economic activity in the tourism sector, which is important in many Pacific Island countries, is
also planned for FY2017.
140. Taxes are becoming an increasingly important source of revenue for Pacific Island governments
to finance public expenditures, such as healthcare, education and infrastructure. Government spending
typically involves multi-year programs and projects, requiring medium-term fiscal planning and for the
government to have accurate forecasts of tax revenue collections. Work on enhancing tax revenue
forecasting methodology will therefore continue into FY2017. The focus will be on complementing the
top-down revenue forecasts by ministries of finance based on economic projections with bottom-up
forecasts that make use of the internal knowledge on tax trends, including on compliance improvement
and risk management activities, by tax administrations and more use of individual taxpayer data. In FSM,
Palau and RMI top-down revenue forecasts will be based on GDP projections by external forecasters, e.g. the US Graduate School or International Monetary Fund. Moreover, analysis of tax revenues will seek to
quantify the effects of tax expenditures (i.e. tax reliefs, tax subsidies, tax incentives, tax aids, tax
concessions).
141. Demographic changes are at the forefront of macroeconomic management challenges in Pacific
Island economies. Some countries are experiencing high and rising birth rates, while others face large
outward migration, internal migration to larger islands, and population ageing. Furthermore, rising
incidence of NCDs is adding fiscal pressures. Technical assistance and training will develop tools and
methodologies for evaluating and managing the fiscal risks of changing demographics. In countries that
have a FP framework population projections will be incorporated into those frameworks to enhance
medium-term fiscal planning and budgeting. For PFTAC’s other members, technical assistance and training
will be tailored and delivered according to needs.
142. Capacity to undertake debt sustainability analysis will be strengthened further—building on the
tools developed in the Cook Islands to improve the management of exchange rate risks and the allocation
of budget funding for debt servicing. Debt sustainability analysis will require having ready access to
necessary data and information, including up-to-date lists of all decisions made in the past on new policies
or projects that will require additional resources in future years, and estimated capital asset repair and
replacement costs. Adequate public debt data is currently an issue in several countries that needs to be
addressed first.
143. In the area of macroeconomic and financial stability, if it is included in the Phase V program, a
priority would be to gain a better understanding of the structure of countries’ financial systems and
financial sector policies. Different financial institutions operate in countries, e.g. commercial banks,
development banks, provident funds, insurance companies, credit unions, micro finance lenders, but
knowledge of the financial products and services offered and their relative contribution to financial
intermediation is limited. PFTAC CD would focus on developing capacity to compile and construct
indicators, including on sectoral balance sheet positions and financial interdependencies, to assess
macroeconomic and financial stability and to produce regular reports on the soundness and efficiency of
countries’ financial systems. Two regional workshops would be organized during the first six months of
the Phase V program on financial development, financial inclusion and economic growth and on financial
stability and natural disasters.
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ANNEX I: THE IMF REGIONAL TECHNICAL ASSISTANCE CENTERS (RTACS)
A. General Information on RTACs
Nine Regional Technical Assistance Centers (RTACs) in the Pacific, the Caribbean, Africa, the Middle East,
and Central America help countries strengthen human and institutional capacity to design and implement
sound macroeconomic policies that promote growth and reduce poverty.
RTACs combine local expertise and on-the-ground capacity building with strategic advice from IMF
headquarters. All technical assistance (TA) and training is integrated into the IMF’s lending and
surveillance operations, and coordinated with other IMF TA as well as that of other providers. All TA is
backstopped by IMF headquarters, ensuring quality and consistency of policy advice.
B. RTACs’ Key Areas of Work and Delivery Modes
RTACs host a team of resident advisors who assist countries in implementing their reform programs. The
composition of competencies is tailored to the specific needs of the region and may include: public
finance management, medium-term expenditure frameworks, tax and customs policy and administration,
revenue administration, debt management, financial sector supervision and regulation, financial sector
development, capital market development, monetary policy and operations, economic and financial
statistics, national accounts and price statistics, financial programming, and training in macroeconomics.
The work of the resident advisors is supported by STX, including in areas that require specialized
knowledge. Other delivery modalities include workshops and seminars, courses on key macroeconomic
issues in collaboration with the IMF Institute, as well as short-term professional attachments.
C. RTACs’ Regional Approach
The IMF‘s regional approach to technical assistance and training allows for better tailoring of assistance to
the particular needs of a region, closer coordination with other assistance providers, and enhanced ability
to respond quickly to emerging needs.
RTACs develop a deep knowledge of their countries and region, including cross-cutting and regional
integration issues. They are close to their clients, and RTAC resident advisors are in frequent contact and
travel to member countries to provide step-by-step assistance with TA implementation. Given their
physical proximity, they can respond promptly to urgent capacity development (CD) requests and follow
up, and are less costly in the delivery of CD. RTACs are using and building local expertise.
D. RTACs’ Governance Structure and Operational Arrangements
RTACs are governed by Steering Committees (SC) composed of representatives of member countries,
donor partners and the IMF. This governance structure has proven highly successful as it builds
stakeholder ownership of work programs, facilitates peer review and networking, and provides a platform
for donor coordination.
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CD needs are identified and prioritized by the country authorities in cooperation with area and CD
departments at IMF headquarters and the centre, and the work plans are endorsed by the Steering
Committee.
TA needs are identified and prioritized by the country authorities in cooperation with area and TA
departments at IMF headquarters and the centre, and the work plans are endorsed by the Steering
Committee.
The day-to-day management of the center falls into the responsibility of the center coordinator who is an
IMF staff member. The center’s professional staff (resident advisors and STX) are recruited, supervised,
and backstopped by the IMF, ensuring quality and consistency of policy advice.
E. Existing RTACs
The Pacific Financial Technical Assistance Center (PFTAC) was established in Suva, Fiji, in 1993 and now
serves 16 PICs and territories, including the Cook Islands, FSM, Fiji, Kiribati, Nauru, Niue, Palau, Papua New
Guinea, RMI, Samoa, Solomon Islands, Timor-Leste, Tokelau, Tonga, Tuvalu, and Vanuatu. Its current
program cycle is funded by the ADB, Australia, the European Union, the IMF, Korea, New Zealand, and the
host country Fiji.
The Caribbean Regional Technical Assistance Center (CARTAC) was established in Bridgetown, Barbados
in 2001. It serves 20 Caribbean island countries and territories, including Anguilla, Antigua and Barbuda,
Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Dominica, Grenada, Guyana,
Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname,
Trinidad and Tobago, and Turks and Caicos. Its current program cycle is funded by Australia, Canada, the
Caribbean Development Bank, the European Union, the IMF, the United Kingdom, the host country
Barbados, and member countries.
The African Regional Technical Assistance Centers (AFRITACs) are part of the IMF’s Africa Capacity-
Building Initiative, launched in May 2002. Responding to calls from African leaders, including under the
New Partnership for Africa’s Development (NEPAD), the Initiative promotes strengthening the capacity of
African countries to design and implement their poverty-reducing strategies, as well as to improve the
coordination of capacity-building technical assistance in the Poverty Reduction Strategy Paper (PRSP)
process. As part of the Initiative, five African Regional Technical Assistance Centers (AFRITACs) have been
established:
AFRITAC East was opened in Dar es Salaam, Tanzania, in 2002, now serves seven countries in East Africa
(Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Tanzania, and Uganda).
AFRITAC West was opened in Bamako, Mali, in 2003 and moved to Abidjan, Côte d’Ivoire, in mid-2012 to
serve ten countries in West Africa (Benin, Burkina Faso, Côte d’Ivoire, Guinea, Guinea-Bissau, Mali,
Mauritania, Niger, Senegal, and Togo).
AFRITAC Central was opened in Libreville, Gabon, in 2007, to serve Burundi, Cameroon, Central African
Republic, Chad, Democratic Republic of the Congo, Equatorial Guinea, Gabon, Republic of Congo, and São
Tomé and Príncipe.
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AFRITAC South was opened in Port Louis, Mauritius, in June 2011, to serve 13 countries in Southern Africa
(Angola, Botswana, Comoros, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, Seychelles, South
Africa, Swaziland, Zambia, and Zimbabwe).
AFRITAC West 2, based in Accra, Ghana, started operations in December 2013, covering the non-
francophone countries from the Economic Community of West African States (ECOWAS) that are not
served by the current AFRITAC West: Cape Verde, The Gambia, Ghana, Liberia, Nigeria, and Sierra Leone.
The AFRITACs are financed by contributions from a number of donor partners, the IMF, as well as host and
member countries. Current donor partners include the African Development Bank, Australia, Brazil,
Canada, China, the European Investment Bank, the European Union, France, Germany, Italy, Kuwait,
Luxembourg, the Netherlands, Switzerland, and the United Kingdom.
The Middle East Regional Technical Assistance Center (METAC) was established in Beirut, Lebanon, in
2004 to serve ten countries/territories in the Middle East: Afghanistan, Egypt, Iraq, Jordan, Lebanon,
Libya, Sudan, Syria, West Bank and Gaza, and Yemen. METAC’s main objective is to help strengthen
capacity for effective macroeconomic and financial management in the region, and to support the region’s
integration into the world economy. A particular focus is to help post-conflict countries in the region
achieve macroeconomic stability and develop basic institutions for policymaking. METAC is designed to
enhance coordination among development partners and to promote effective implementation of
economic initiatives within the Middle East region. METAC’s current program cycle is financed by
contributions from the European Investment Bank, the European Union, France, Germany, the IMF,
Kuwait, Oman, the United States, the host country Lebanon, and member countries.
The Central America, Panama and the Dominican Republic Regional Technical Assistance Center
(CAPTAC-DR) started operations in May 2009 in Guatemala. It serves Costa Rica, the Dominican Republic,
El Salvador, Guatemala, Honduras, Nicaragua, and Panama. The Center’s technical assistance is focused on
financial sector supervision, tax and customs administration, medium-term expenditure frameworks and
PFM, money markets, and macroeconomic statistics. Improved institutions and increased regional
integration are the objectives. The Center’s new program phase is currently funded by the European
Union, Mexico, Luxembourg, the IMF, the host country Guatemala, and member countries. Negotiations
with other donor partners of Phase I (Canada, Germany, the Central American Bank for Economic
Integration, the Inter-American Development Bank) as well as potential new donor partners are ongoing.
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ANNEX II: PFTAC STAFF
The Center is managed by a Coordinator and comprises seven resident advisors and four local
administrative staff. PFTAC also employs STX from the region and the IMF roster of experts.
SCOTT ROGER, PFTAC COORDINATOR Scott joined PFTAC in January 2013. Scott is a Canadian and New Zealander,
and served in the Bank of Canada, the Reserve Bank of New Zealand and at
the Bank for International Settlements before joining the IMF. At the IMF he
served in the Asia and Pacific Department and the Monetary and Capital
Markets Departments and, most recently, in the IMF European Office.
IRIS CLAUS, MACROECONOMIC ANALYSIS ADVISOR Iris joined PFTAC in February 2015. Iris has dual German and Canadian
nationality. Before joining PFTAC she held policy and research positions at
the Asian Development Bank, the New Zealand Inland Revenue, the New
Zealand Treasury, the Reserve Bank of New Zealand, and the Bank of
Canada. She is on the editorial boards of the Journal of Economic Surveys
and Asian Economic Papers and is a Senior Fellow at the University of
Waikato, New Zealand.
RUSSEL FREEMAN, STATISTICS ADVISOR Russel Freeman joined PFTAC in September 2013. Russel is a New Zealander,
and worked at Statistics New Zealand before becoming a TA consultant on
prices and national accounts predominantly in the Pacific and Africa. More
recently he worked as a senior economist in the IMF Statistics Department.
RON HACKETT, PUBLIC FINANCIAL MANAGEMENT ADVISOR Ron joined PFTAC in July 2011. Ron is American and served for many years
as a financial manager in the Minnesota State Government. Later he
provided advice to many countries in the Middle East and Africa before
joining PFTAC.
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GREGORY LEGOFF, STATISTICS ADVISOR Gregory Legoff joined PFTAC in October 2012. In August 2015 he transferred
to AFRITAC South, in Mauritius. Gregory is French and Australian and has
extensive experience in real sector statistics at the OECD in Paris, and in
national accounts statistics at the Australian Bureau of Statistics.
CHITA MARZAN, PUBLIC FINANCIAL MANAGEMENT ADVISOR Chita joined PFTAC in September 2014. Chita is a Filipino, and served in
senior positions in financial and budget management in the Philippines
government during the first part of her career. Subsequently she worked as
a PFM adviser with the UNDP in Rwanda and Bangladesh before joining the
IMF Fiscal Affairs Department as a PFM technical adviser.
PIERRE SÉGUIN, FINANCIAL SECTOR ADVISOR Pierre Séguin joined PFTAC in July 2013. Pierre is Canadian and has over 30
years experience in financial sector regulation in the Ontario Ministry of
Financial Institutions, as a Senior Inspector, the Canadian government, and
as a technical advisor in Asia, Africa and the Caribbean.
STAN SHROSBREE, REVENUE ADMINISTRATION ADVISOR Stan joined PFTAC in June 2014. Stan is South African and started his career
in the South African Revenue Services before joining the IRD in New
Zealand. He later served as Advisor to the Directorate General Taxation in
Indonesia. Since joining the IMF in 2006, he has been involved in tax reform
initiatives in South Eastern Europe.
RICHARD WILD, STATISTICS ADVISOR Richard joined PFTAC in January 2016, replacing Greg Legoff. Richard is
British and has broad experience of national accounts statistics gained in
previous roles at the UK Office for National Statistics. Prior to joining PFTAC,
Richard worked for the IMF as a short-term expert
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PETER AMPUTCH, LOGISTICS ASSISTANT
In December 2015, Peter transferred to the office of the IMF Resident
Representative in the Pacific. Prior to that Peter supported the
administration of travel and payment processing, mission documentation
and managed PFTAC security arrangements.
RUSILA BITUWAQA, TEAM ASSISTANT
Rusila is PFTAC's receptionist and is also responsible for PFTAC travel
arrangements and assists with accounting, security and conference logistics.
She has a Diploma in Business Accounting from FIT.
ELENOA BOGIWALU, SENIOR INFORMATION ASSISTANT
Elenoa is responsible for general administration of the Centre, including
mission documentation, IT systems, external communications and
publications. She worked previously at the RBF and the ILO.
JOSAIA NAKETE, LOGISTICS ASSISTANT
Josaia Nakete joined PFTAC in December 2015, replacing Peter Amputch.
Josaia supports the administration of travel and payment processing,
mission documentation and manages PFTAC security arrangements.
Previously he spent 9 years with the Government of Fiji, including 7 years
with Fijian Elections Office, and more recently with the Ministry of Finance.
MARIA NINA SAMUELA, SENIOR OPERATIONS ASSISTANT
Nina is responsible for accounting and payments and coordinating travel
and seminar arrangements. She has been working for the Centre since 1993.
Prior to this, she worked in the travel industry and with USAID.
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ANNEX III: PFTAC RESULTS-BASED MANAGEMENT LOGICAL FRAMEWORK FY2016
Objective: Improved economic management and economic growth in the Pacific Islands
Regional Program Objective Verifiable Indicators Progress on Indicators
General
Risks/Assumptions/
Risk Mitigation 1. Improved public financial
management.
Progress relative to the May 2013 baseline, as
measured by the “Percent of Members with
Repeat PEFAs showing Improvement or No
Change with an A or B rating in both years”:
the 4 indicators for “Credibility of the
Budget”
the 6 indicators for “Comprehensiveness and
Transparency”
2 indicators (#11 & 12) for “Policy-Based Budgeting”
The 4 indicators for “Accounting, Recording, and Reporting”
The 3 indicators for “External Scrutiny and Audit”
Improvements in PFM systems noted in other
qualitative assessments.
All but 2 of the PFTAC countries have now had at
least 1 formal PEFA Assessment, but both of
these have been through a PFTAC coordinated
self-assessment. PFTAC has constructed a
database of indicators used to monitor PFM
progress.
Summaries of up-to-date PEFA results will be
presented in PFTAC’s Annual Reports and will be
reported to FEMM on a periodic basis.
Requires political
commitment to
implementing PFM reform
roadmaps.
Sustained progress is
dependent on broader
reforms to the public sector,
including recruitment,
retention and remuneration.
Coordinated development
partner financial and
technical support required
for implementation of PFM
reforms.
2. Broader-based and more efficient
revenue systems.
Improved ratio of tax collected to administration
expenses.
Improved rankings on benchmarking of regional
tax administrations.
IMF's RA-FIT first cut of data has been finalized
and a second round is now in process. The results
will be published on the database.
PITAA benchmarking is conducted bi-annually and
the next round will be completed at the end of
Political commitment to tax
reform and adequate
resourcing of tax
administrations are essential
for improved revenue
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Regional Program Objective Verifiable Indicators Progress on Indicators
General
Risks/Assumptions/
Risk Mitigation the PFTAC program cycle. collections.
3. Increased resolution and
minimization of the risk factors
identified in the financial system.
Timely assessment of the condition and
performance of individual banks and the overall
banking system by supervisory authorities.
Increased frequency of on-site examinations of
financial institutions.
Greater compliance with Basel Core Principles
across the Pacific.
Central banks and supervisory agencies currently
maintain adequate off-site recording of the
condition of the banking system but timeliness
and quality of data could be enhanced.
On site examinations are made by most
jurisdictions; Tonga has recently committed to
increasing the frequency.
Adequate financial and staff
resources needed in
supervisory institutions.
4. More timely and reliable
economic statistics.
Improvement in PIC statistical capacity indicator
scores;
Improved GDDS participation and compliance.
Increased quarterly publication of GDP and
expenditure measures.
Statistical capacity indicators will be monitored
through the World Bank's public database.
Since the start of Phase IV, 7 more countries have
begun participation in the GDDS initiative.
Methodology improvements in second GDP
measures effected in a number of countries,
developed in Fiji and Kiribati and quarterly GDP
methodologies under development in Fiji.
Requires political
commitment and sufficient
resourcing of NSOs and
other statistical agencies.
Increased and better
coordinated development
partner assistance required
for continued progress
through the launch of phase
II of the Ten Year Pacific
Statistics Strategy.
5. Improve overall quality of analysis underlying macroeconomic policy.
5.1 Integrated macroeconomic monitoring / projection processes.
5.2 Multi-year fiscal planning frameworks.
5.3 Ability to assess debt sustainability.
5.4 Incorporation of disaster risks into the fiscal planning process.
5.1 Financial programming frameworks have been introduced in seven countries; the use of frameworks can be enhanced further to support macroeconomic analysis and policy.
5.2 Few countries routinely undertake fiscal planning beyond a two-year budget horizon.
Political commitment to transparency of economic information is required.
Adequate staffing and resourcing of economic units are required.
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Regional Program Objective Verifiable Indicators Progress on Indicators
General
Risks/Assumptions/
Risk Mitigation 5.3 Few countries are able conduct their own debt sustainability assessments.
5.4 Some countries incorporate contingency reserves into the budget process; some trust funds can provide limited contingency financing.
Budget and planning processes are coordinated.
Accurate and timely disaggregated public debt data are available.
Disaster risk management is considered a priority.
Public Financial Management Logical Framework FY2016
Objective: Improved public financial management
Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
1.1 At least 1 PEFA assessment conducted in each PFTAC country during the funding cycle with significant country staff involvement and ownership
Cook Islands 4 Finalize report and obtain PEFA
Check
2 LTX RBM Milestone #1 No. of formal
assessment conducted
Conducted December
2014; Received PEFA
check with final
comments in August
14 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
PFTAC Annual Report 2016
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
2015.
Kiribati 1 PEFA Self Assessment 28 LTX RBM Milestone #1: Number of self-
assessments conducted
Tentatively scheduled for
Feb-April quarter of 2016
Nauru 1 Self Assessment in conjunction with
an AusDFAT
28 LTX
RBM Milestone #1: Number of self-assessments conducted
Tentatively scheduled for
Feb-April quarter of 2016
in cooperation with
Australia DFAT
Papua New
Guinea
4 PEFA follow-up and Action Plan
Development
combined
with PNG
Roadmap
effort below
RBM Milestone #1: Number of self-
assessments conducted
PEFA was finalized in
August 2015 after review
by PEFA Secretariat
Tuvalu 2 PEFA Self Assessment with AusDFAT
Assessment of National Systems
8 LTX +7 LTX
+17 STX
RBM Milestone #1: Number of self-
assessments conducted
Conducted May 19- June
4, 2015.
Vanuatu 2 PEFA Self-assessment & PFM
Roadmap start
12 LTX +15
STX+15 STX
RBM Milestone #1: Number of self-
assessments conducted
Conducted June 1-12,
2015
1.2 : Reform road maps developed following each PEFA assessment
Papua New
Guinea
4 PEFA follow-up and Action Plan
Development
7 LTX +9
STX+9 STX
RBM Milestone #3: Number of PFM
reform roadmaps developed
Government adopted the
PFM Reform Roadmap in
September, 2015
RMI 3 Determine areas of priority to
strengthen capacity to operationalize
RBM Milestone #3: Number of PFM
reform roadmaps developed
PFTAC advisors had a
teleconference with the
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
PFM Reform Plan new RMI Finance
Secretary and discussed
priority areas (see
proposed mission on
Budget Execution)
Tonga 3 PFM Case Study with World Bank,
ADB, and Australia DFAT
5 LTX RBM Milestone #3: Number of PFM
reform roadmaps developed
This joint September
mission with the World
Bank, ADB, and AusDFAT
was intended primarily
to identify
strengths/weaknesses of
past approaches to
Roadmap development
and implementation
Tonga 1 Workshop for the Public Accounts
Committee on legislative scrutiny of
PFM
7 STX; 4 LTX RBM Milestone #3: Number of PFM
reform roadmaps developed
The workshop was aimed
at strengthening to
improve performance on
legislative scrutiny of the
budget and the accounts.
PFTAC funded the
participation of STX Save
Narube and PFM Adviser
Chita Marzan as among
the resource
speakers/facilitators.
Workshop cost was
funded by DFAT and
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
overall coordination was
done by PASAI.
Tuvalu PFM Roadmap start Combined
with Self-
Assessment
Reported
Above
Vanuatu PFM Roadmap start
Reported
Above
Due to political crisis,
PFM reform planning is
expected to be moved to
FY17.
1.3 : Modernized legal frameworks and financial instructions implemented
Cook Islands 3 TA for the revision of the
MFEM/PFM Act
46 RBM Milestone #4: Number of
countries with identified legal
obstacles ( in law or financial
instructions) to implementing good
PFM practice (as reflected in PFTAC's
RBM outcomes 1.4 – 1.9) who were
provided TA for improvements
TA started in August
2015 as home-based
work, followed by in-
country mission in
September, and follow-
up home-based work to
finalize a draft in
October. Expected to be
submitted to Parliament
in January 2016.
Nauru 0 Implementing instructions for
budget execution consistent with
FMIS
Same as above Tentatively planned for
FY17
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
Solomon
Islands
3 Improve draft of new Financial
Instructions
Same as above Moved to FY17
1.4 : Budget Credibility Improves (PEFA Indicators 1-4)
Activity in this area is heavily inter-twinned with 1.6
1.5 : Budget Comprehensiveness and Transparency Progresses Toward International Standards (PEFA Indicators 5-10)
Activity in this area is heavily inter-twinned with 1.6
1.6 : Budgeting Becomes More Policy Focused with a Medium-term Orientation (PEFA Indicators 11-12)
Fiji 3 Training of budget analysts to
improve the quality of activity-level
budget narrative including improved
medium-term focus with greater
policy/strategy content
2 LTX RBM Milestone #16: Budget
documents clearly explain the policies
and strategies driving funding changes;
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Training commenced in
March 2015 with an early
focus on non-tax revenue
reviews. Training
continued periodically on
an as-need basis through
October.
Fiji 3 Review of operations for the Fiji
National Provident Find
5 Same as above Mission report is
complete.
Fiji Improve budget document in line
with international standards
3 LTX Policy/strategy
information added to
budget document at the
Program/activity level
Solomon
Islands
Support to APD’s 5th ECF Review 3 LTX
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
Tonga 2 High Level Dialog with Cabinet on
PFM issues and improving the
integration of planning and
budgeting
RBM Milestone #16: Budget
documents clearly explain the policies
and strategies driving funding changes;
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Moved to FY17
Regional 4
Deep Sea Minerals workshop
focusing on PFM and tax policy
issues
10 LTX &
STX
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Workshop conducted
August 24-28
Regional 4 IMF/PFTAC joint workshop on Fiscal
Frameworks
10 LTX RBM Milestone #16: Budget
documents clearly explain the policies
and strategies driving funding changes;
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Workshop conducted on
June 22-25
Sub-Regional 0 Pension funding challenges and
potential options
28 (14 LTX +
14 STX)
RBM Milestone #16: Budget
documents clearly explain the policies
and strategies driving funding changes;
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Tentatively scheduled for
the March/April 2016
period
Sub-regional 4 Expenditure Forecasting- Group A
(Countries not on calendar financial
years)
5 LTX RBM Milestone #16: Budget
documents clearly explain the policies
and strategies driving funding changes;
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Nov 2-6, Nadi (With
Macro-Forecasting
Advisor & UNESCAP)
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
Sub-regional Expenditure Forecasting- Group B
(countries on calendar financial
years)
5 LTX RBM Milestone #16: Budget
documents clearly explain the policies
and strategies driving funding changes;
#17: Budget process focuses on a
medium-term time-frame at the
program/sub-program level.
Tentative-Early February
(With Macro-Forecasting
Advisor & UNESCAP)
1.7 : Budget Execution Progresses Toward International Standards (PEFA Indicators 16_21)
FSM Introductory mission to improve
treasury management
5 LTX Milestone #22: Comprehensive
expenditure commitment controls are
in place and effectively limit
commitments to actual cash
availability and approved budget
allocations
Tentatively planned for
the March/ April 2016
period.
Marshall Is. 1 Scoping mission on improving
budget execution internal controls
5LTX Milestone #22: Comprehensive
expenditure commitment controls are
in place and effectively limit
commitments to actual cash
availability and approved budget
allocations
Tentatively scheduled
end of March 2016
Papua New
Guinea
3 Technical support for accelerated
implementation of PNG’s new IFMIS
30 STX +39
STX
Effective operation of an IFMS has
implications for many milestones
within both this outcome group, as
well as outcome group 1.8 (accounting,
recording, and reporting). Most
Activity is also highly
relevant to effective
achievement of many
other RBM Milestones,
particularly
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
important for outcome group 1.7 is:
RBM Milestone #22: Comprehensive
expenditure commitment controls are
in place and effectively limit
commitments to actual cash
availability and approved budget
allocations
RBM Milestone 24: Bank
reconciliation for all
central government bank
accounts takes place at
least monthly at
aggregate and detailed
levels, usually within 4
weeks of end of period.
Significant changes made
to the organization,
operation, and coverage
of PNG's "new" IFMS.
Outsourcing of
communications linkages
and other IT services has
occurred, and number of
departments covered by
the system has increased
from 3 to 22 (in
December 2015) since
PFTAC TA commenced
(May 2014)
Papua New
Guinea
2 Improve cash management 12 STX+19
STX
Milestone 18: Ministries are provided
good cash flow information on the
periodic availability of funds for
First mission from June
22 to July 10, and second
mission in September
2015 conducted by
PFTAC Annual Report 2016
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Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
commitment of expenditures. Stephen Mayes.
Recommendations to
implement a cash
pooling scheme accepted
by Ministry of Finance
and BPNG. Cash
Management Unit
created by DOF to
resolve delay in bank
reconciliation.
Samoa 2 Improve cash management 14 STX Milestone 18: Ministries are provided
good cash flow information on the
periodic availability of funds for
commitment of expenditures.
Mission completed on
November 3-16, 2015
with Mark Silins.
Recommendations
accepted by MOF
Solomon
Islands
1 Improve cash management Milestone 18: Ministries are provided
good cash flow information on the
periodic availability of funds for
commitment of expenditures.
Moved to FY17
Tonga Treasury business process review 19 STX Milestone #22: Comprehensive
expenditure commitment controls are
in place and effectively limit
commitments to actual cash
availability and approved budget
allocations
Has been cancelled as
the authorities decided
to make use of existing
software for the short-
term
PFTAC Annual Report 2016
Page | 73
Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
Vanuatu 3 Strengthening Internal Audit 12 STX Internal audit focusing on systems risks Follow-up TA conducted
in October 2015 by Tony
Prcevich. Report
indicated progress in
using the audit software
and risk-based auditing
1.8 : Accounting, Recording and Reporting Improves in line with international standards (PEFA Indicators 22-25)
Fiji 3 Staff mentoring and development of
policy/manual on debt accounting
based on IPSAS
15 LTX Milestone #27: Consolidated
government financial statement is
prepared annually according to
internationally acceptable standards;
submitted to external audit within 6
months of fiscal year end, and includes
full information on revenue,
expenditure and financial
assets/liabilities.
Continuing advisory
provided, and resulted to
improving presentation
of the 2014 financial
statements, proposed
debt accounting and
reporting policy and
manual to be presented
to Policy Committee in
January 2016.
Samoa 2 Develop strategy on fiscal oversight
for state-owned enterprises
12 STX+16 LTX
Consolidated fiscal risk issues on SOEs
submitted on an annual basis
according to international standards
Conducted on August 24
to September 4, 2015
with James Colvin.
Recommendations
accepted, and expected
to be implemented
starting in the 2016
report on SOEs.
PFTAC Annual Report 2016
Page | 74
Measurable Outcome
Country
Progress against Milestones at end-FY201514
Activity/Mission Description Person days Relevant Milestone* Comments
Samoa 1 Improve accounting and financial
reporting framework
12 LTX+12 STX
Milestone #27: Consolidated
government financial statement is
prepared annually according to
internationally acceptable standards;
submitted to external audit within 6
months of fiscal year end, and includes
full information on revenue,
expenditure and financial
assets/liabilities.
Tentatively planned on
February 29 to March
11, 2016 with Eroni
Vatuloka.
Tonga 2 Improve accounting and financial
reporting framework
12 LTX+12
STX
Milestone #27: Consolidated
government financial statement is
prepared annually according to
internationally acceptable standards;
submitted to external audit within 6
months of fiscal year end, and includes
full information on revenue,
expenditure and financial
assets/liabilities.
Conducted in January
2016 with Eroni
Vatuloka; A three year
reform plan was
proposed and adopted
by the authorities.
Regional 2 Joint PFTAC/PASAI Workshop on
accounting and auditing reforms
6 LTX Milestone #27: Consolidated
government financial statement is
prepared annually according to
internationally acceptable standards
Completed on
November 23-27, 2015;
Participants gave very
satisfactory evaluation.
PFTAC Annual Report 2016
Page | 75
Revenue Policy and Administration FY2016
Objective: Broader-based and more efficient revenue systems
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
2.2 : Appropriate legislation and regulations for effective policy implementation are adopted
Fiji
Nauru
Regional
2
2
Review of the Income Tax Decree.
Finalize the Business Tax Bill.
Workshop: Developing a seabed
minerals regime.
12
12
3
Laws enacted
Laws drafted.
Creating an understanding
of seabed mining.
Legislation updated and
implemented
Business Tax Bill finalized –
implementation targeted for
July 1, 2016.
PFTAC has been instrumental in
advising PICs on this important topic.
2.3 : Modern and integrated processes are adopted to verify & maintain taxpayer information & compliance obligations
Cook
Islands
3 Improving core tax functions. 15 Core tax functions
operating at TADAT
efficiency levels.
Introduce a project plan to improve
core tax operations.
15 Ratings defined as follows: 1= Very limited progress towards objective; 2=Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
PFTAC Annual Report 2016
Page | 76
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
Fiji 3
Improving the audit function (2
missions).
20 A capable audit function
operating at TADAT
efficiency levels.
(a) audit department restructured
and additionally staffed (b) risk
management Unit created and
staffed (c) a modern risk based audit
plan implemented from January,
2016.
Fiji 3 Improving core tax functions. 20 Core tax functions
operating at TADAT
efficiency levels.
Project Reforms Office created to
address weaknesses exposed by
TADAT and all PFTAC
recommendations
Fiji 3 Improving the management of tax
returns.
On-time filing of tax returns
at TADAT efficiency levels.
New processes put in place to
facilitate on-time filing of tax
returns.
Kiribati
Kiribati
Kiribati
Republic of
the
Marshall
Islands
2
2
2
2
Improving core tax functions (2
missions).
Review overall reform progress and
determine future technical assistance
needs.
Review of VAT implementation.
Strengthening core tax functions.
10
10
10
15
A functionally driven
organization to facilitate
improved compliance.
Progress reviewed and TA
needs defined.
Successful implementation
of VAT.
Core tax functions
operating at TADAT
efficiency levels.
TA and training provided to create a
better understanding of core tax
functions and operations attached
thereto.
Progress evaluated, barriers to
reform identified and next steps put
in place.
VAT implemented April 2014, post
implementation review carried out
to critique performance.
November 2015 election results lean
towards a more intense tax reform
program. Current activities will be
expanded to facilitate a more
PFTAC Annual Report 2016
Page | 77
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
Republic of
the
Marshall
Islands
2 Building operational capability to
support VAT implementation.
15
Successful implementation
of VAT.
structured modernization plan.
Policy and legal framework already
in place. PFTAC to assist with
operational implementation and
public awareness of the VAT system.
Republic of
the
Marshall
Islands.
Samoa
Samoa
Tonga
Tonga
Tuvalu
Regional
3
3
3
3
3
-
-
Review of overall reform
progress/develop a strategic plan
(overlap with RBM 2.8).
Review overall reform progress.
Strengthen arrears and returns
management (2 missions).
Review overall reform progress.
Review of the taxpayer services
function.
Review overall reform progress.
Workshop: Management of the audit
function.
10
5
10
10
10
10
5
Reform program reviewed
and strategic plan
developed and adopted.
Progress reviewed and TA
needs identified.
Improve on-time payment
and on-time filing to TADAT
levels.
Progress to be reviewed
and TA needs identified.
Taxpayers receiving high
levels of service and
education.
Progress reviewed and TA
needs identified.
Improve management of
the audit function to
Strategic and operational plan
designed and signed off by the
authorities.
Progress evaluated, barriers to
reform identified and a renewed TA
plan put in place (1st quarter 2016).
A PFTAC facilitated improvement
plan accepted an introduced by the
authorities.
Progress evaluated, barriers to
reform identified and a renewed TA
plan developed (1st quarter 2016).
Taxpayer services function
introduced and reviewed to identity
gaps.
Progress evaluated, barriers to
reform identified and next steps put
in place.
The need to improve management
capability identified in the
PFTAC Annual Report 2016
Page | 78
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
Regional
Regional
-
-
Workshop: Management of the
taxpayer services function.
Workshop: Arrears and returns
management.
7
5
TADAT levels.
Improve management of
the taxpayer services
function.
Improve on-time payment
and on-time filing to TADAT
efficiency levels.
PFTAC/PITAA training needs analysis.
PFTAC training is playing a key role in
this area.
The need to improve management
capability identified in the
PFTAC/PITAA training needs analysis.
PFTAC training is playing a key role in
this area.
Data has shown that PIC’s
performance in this area is weak.
The workshop provided an in-depth
overview of modern management
methods and practical steps to
improve performance.
2.4 : Business systems & processes are based on risk-management principles
Fiji 3 Compliance risk management
workshop.
5
Introduction of a
compliance improvement
strategy.
(a) Risk Management Unit created
and staffed (b) a risk based
compliance improvement strategy
introduced with effect from January,
2016.
Fiji
Federated
States of
3
2
Compliance risk management.
Compliance Risk Management (2
missions).
25
23
A risk based revenue
administration with
capability to identify and
treat highest risks.
Risks identified and
treatment plan
As above.
Risk based compliance plan
introduced with good results
PFTAC Annual Report 2016
Page | 79
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
Micronesia
implemented. achieved to date.
2.5 : Compliance improvement strategies use a mixture of service and enforcement approaches
Fiji 2 Developing a compliance improvement
strategy.
5 Introduction of a
compliance improvement
strategy.
Compliance improvement strategy
designed and implemented with
effect from January 1, 2016.
Fiji
Samoa
Tonga
Vanuatu
Vanuatu
2
3
3
3
3
Compliance risk management (2
missions).
Compliance Risk Management.
Compliance Risk Management.
Compliance risk management.
Review of the compliance improvement
strategy.
14
10
10
10
10
Risks identified, assessed
and addressed.
Compliance Improvement
strategy introduced.
Compliance improvement
strategy introduced.
Introduction of a
compliance improvement
strategy.
Proper functioning of a
compliance improvement
strategy.
Compliance improvement strategy
designed and implemented with
effect from January, 2016.
PFTAC facilitated compliance plan
adopted and introduced.
PFTAC assisted in developing a
framework for a compliance plan
and assisted in introducing a risk
management unit.
PFTAC facilitated compliance
improvement strategy adopted and
implemented.
Compliance improvement strategy
evaluated and weaknesses
identified.
Regional
-
Workshop: Improving compliance in the
tourism industry.
8
A regional initiative to
understand the tourism
Tourism represents a big sector in
PICs with anecdotal evidence of high
PFTAC Annual Report 2016
Page | 80
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
Regional
Regional
Regional
Regional
-
-
-
-
Workshop: Identifying and dealing with
VAT fraud.
PITAA annual conference “Modernizing
Tax Administration in the Region” –
focus to improve compliance (2STX).
Workshop: Compliance Risk
Management (2STX)
Workshop: Performance management
7
4
10
10
industry and current
compliance levels.
Improving VAT compliance.
Improving compliance.
Improved use of
internal/external data to
identify non-compliance.
Introduction of a
compliance improvement
strategy/use of data to
improve compliance and
regional commitment to
the RAFIT.
tax evasion. This workshop will help
PICs in designing a plan to address
this issue.
VAT is a high risk area that PICs need
to understand more fully. This
workshop will provide valuable
information on how to use internal
and third party information to
identify risks.
The workshop reemphasized the
PFTAC strategy to improve tax
compliance through identification
and treatment of risk.
PFTAC has exposed PICs to the
importance of extracting and using
data to identify compliance trends
and high risk.
5 PICs have or are in the process of
implementing a compliance
improvement strategy. PFTAC
assistance has been vital in creating
a broader understanding of modern
compliance management concepts.
2.7 : Organizational and operating structures are relevant to the business and allow for the effective use of resources
Kiribati
2
Designing a new organizational
structure.
10
A new functionally based
organizational structure
Structure approved by the Ministry
of Finance and implemented.
PFTAC Annual Report 2016
Page | 81
Measurable Outcome
Country
Progress against
Milestones at end-FY201515
Activity/Mission Description Person Days
Relevant Milestone Comments
Palau
Palau
Tonga
2
2
2
Design a new strategic plan and
develop a new organizational structure
(overlap between RBM 2.7 and 2.8).
Implement a new organizational
structure.
Review of the organizational structure.
10
10
10
introduced.
A new functionally based
organizational structure
implemented.
A new functionally based
organizational structure
implemented.
A new function based
organizational structure
New structure designed accepted by
the authorities.
New structure accepted by the
authorities and currently being
implemented.
Proposals developed and presented
to the authorities.
2.8 : Good corporate strategies, business planning processes and management information reports are adopted, implemented and updated regularly
Fiji 3 Designing a modernization change
management strategy.
10 A planned and coordinated
modernization plan
supported by employees.
Planned for April, 2016.
Fiji
Regional
3
-
Facilitating change management
implementation.
Conference: Oceania Customs
Organization.
5
5
A planned and coordinated
modernization plan
supported by employees.
Building a relationship
between PFTAC and the
OCO.
PFTAC provided advice on
facilitating change and setting up a
project management structure to
oversee reforms.
Ensuring that both organizations are
supportive of each other’s strategies
and avoid overlaps.
PFTAC Annual Report 2016
Page | 82
Financial Sector Supervision Logical Framework FY2016
Objective: Increased resolution and minimization of the risk factors identified in the financial system.
1 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Measurable Outcome
Country Progress against
Milestones at end-FY20151
Activity/Mission Description Person Days
Relevant Milestone Comments
3.1 Development and Implementation of Prudential Returns
Cook
Islands
5 None, section completed Banks are submitting returns
Production of reports
Implemented
Palau 5 None, section completed Banks are submitting returns
Production of reports
Implemented
Solomon
Islands
5 None, section completed Banks are submitting returns
Production of reports
Implemented
Tonga 5 None, section competed Banks are submitting returns
Production of reports
implemented
Vanuatu 5 None, section completed Banks are submitting returns
Production of reports
implemented
3.2 Implementation of Financial Sector Information System (FSIS)
PFTAC Annual Report 2016
Page | 83
2 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Regional Pilot program concluded in Solomon
Islands. Further deployment
terminated.
Measurable Outcome
Country Progress against
Milestones at end-FY20152
Activity/Mission Description Person Days
Relevant Milestone Comments
3.3 Strengthened Off-site Supervision
Papua
New
Guinea
Timor-
Leste
4
2
Workshop on Consolidated
Supervision of Conglomerates
Training session on Preparedness
for an on-site examination.
Include scoping, financial review,
data analysis, planning, team
tasks, and drafting engagement
letter.
7
7
Participants are able to
perform a financial review of a
conglomerate and prepare for
its on-site examination.
Participants are able to plan
the on-site examination of a
commercial bank
A STX delivered a five day workshop
sponsored by PFTAC. 24 participants.
December 2015
Workshop held for examiners in
preparation for an up-coming
examination of a commercial bank.
Regional 3 Training session on Preparedness
for an on-site examination.
Include scoping, financial review,
data analysis, planning, team
tasks, and drafting engagement
letter.
7 Participants are able to plan
the on-site examination of a
commercial bank
Workshop held in Guam; Participants
from Palau, FSM and Marshall Islands
June 2015
PFTAC Annual Report 2016
Page | 84
3 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Measurable Outcome
Country Progress against
Milestones at end-FY20153
Activity/Mission Description Person Days
Relevant Milestone Comments
3.4 Strengthened On-site Examination
FSM 3 On-site examination
Development bank
15 Examination concluded in
accordance with plan
STX Support Program
March 2016
Palau 3 On-site examination
Development bank
15 Examination concluded in
accordance with plan
STX Support Program
September 2015
Samoa
3
On-site examination
Commercial bank
15
Examination concluded in
accordance with Plan
STX Support Program
August 2015
Samoa
3
On-site examination
Commercial Bank
15
Examination concluded in
accordance with Plan
STX Support Program
November 2015
Samoa
3
On-site examination
Commercial Bank
15
Examination concluded in
accordance with Plan
STX Support Program
March 2016
Timor-Leste 2 On-site examination
Commercial Bank
15
Examination concluded in
accordance with Plan
STX Support Program
September 2015
2 On-site examination
Commercial Bank
15
Examination concluded in
accordance with Plan
STX Support Program
March 2016
Tonga
3 On-site examination
Development Bank
15 Examination Concluded in
accordance with Plan
LTX Support Program
June 2015
PFTAC Annual Report 2016
Page | 85
4 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Measurable Outcome
Country Progress against
Milestones at end-FY20154
Activity/Mission Description Person Days
Relevant Milestone Comments
Regional
Regional
3
3
AFSPC Annual workshop
How to examine Board
Governance
AFSPC annual workshop
Banking supervision
Needs assessment Questionnaire
2
1
Supervisors will be able to
adequately review the
Governance of Bank Boards.
Supervisors provided input
into the development of the
Basel Core Principle Banking
Supervision Questionnaire.
FSM, Fiji, Palau, PNG, Samoa, Solomon
Islands, Tonga, Vanuatu, Cook Islands
and Timor-Leste.
21 Participants Aug 2015
FSM, Fiji, Palau, PNG, Samoa, Solomon
Islands, Tonga, Vanuatu, Cook Islands
and Timor-Leste.
21 Participants Aug 2015
3.5 Development of Standardized Examination Reports
Palau
3 Drafting on-site examination
report: Development bank
2 Examination report drafted
and presented to bank
STX Support Program
September 2015
Samoa
Samoa
Timor-Leste
Tonga
3
3
2
3
Drafting on-site examination
Report: Commercial bank
Drafting on-site examination
Report: Commercial Bank
Drafting on-site examination
Report: Commercial Bank
Drafting on-site examination
Report: Development Bank
2
2
2
2
Examination report drafted
and presented to bank
Examination report drafted
and presented to bank
Examination report drafted
and presented to bank
Examination report drafted
and presented to bank
STX Support Program
August 2015
STX Support Program
November 2015
STX Support Program
September 2015
LTX Support Program
June 2015
PFTAC Annual Report 2016
Page | 86
3.8 Modernized Legal Framework
Fiji
Tonga
Tuvalu
3
3
3
Workshop
Drafting Credit Union Act
Review current Prudential
Statements, amend where
required and draft new
Regulations.
Provided amendment to the
Banking Commission Act
7
15
3
Draft completed and ready for
legislative process
Draft process competed and
results submitted to Reserve
Bank.
Ministry of Finance will submit
to Parliament for approval.
IMF Legal Dept. lead the workshop with
support from PFTAC.
Reviewed all Prudential Statements in
light of amendments to the FI Act.
Slight change to the act required to
facilitate its implementation
Regional 3 Workshop
Drafting a credit Union Act
7 Participants have sufficient
information to both amend
their current CU Act or Repeal
and present a new Act.
IMF Legal department lead the
workshop with support from PFTAC
3.9 Non-banks, Credit unions, and Microfinance institutions have Strengthened Legal, Supervisory and Operational Frameworks
Fiji 3 Workshop: Capacity Building
Credit Unions Financial Reporting
10 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards.
5 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Measurable Outcome
Country Progress against
Milestones at end-FY20155
Activity/Mission Description Person Days
Relevant Milestone Comments
PFTAC Annual Report 2016
Page | 87
FSM 2 Workshop; Capacity building
Credit Unions Financial Reporting
7 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards.
Palau 3 Workshop: Capacity building
Credit Unions Financial Reporting
9 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards.
Samoa 3 Workshop: Capacity building
Credit Unions Financial Reporting
6 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards.
Solomon
Islands
3 Workshop: Capacity building
Credit Unions Financial reporting
7 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards
Tonga 3 Workshop: Capacity building
Credit Unions Financial reporting
7 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards
6 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Measurable Outcome
Country Progress against
Milestones at end-FY20156
Activity/Mission Description Person Days
Relevant Milestone Comments
PFTAC Annual Report 2016
Page | 88
Vanuatu
3
Workshop; Capacity Building
Credit Unions Financial Reporting
7 Financial statements are
reviewed and regulatory
compliance established
Review performed to establish the level
of compliance against international
standards.
3.10: Effective Outreach on Financial Sector Issues
Regional (1) Regional Financial Sector
Development Partners' meeting
2 Partners meeting
Exchange on program activities
Provide an opportunity to exchange on
our activities in the region
Host: European Union Nov 2015
Regional (2) Annual AFSPC meeting 5 Review of the year's
performance, presentation of
the YE16 program
Host: Solomon Islands
Representatives from 11 countries
August 2015
Regional (3) Governors' Annual Meeting 3 Presentation on PFTAC's
Activities
Host: Reserve Bank NZ
December 2014
Regional (4) By-annual Microfinance
Conference
4 Review Pacific region activities
and financial inclusion
programs
Host: Solomon Islands
September 2015
Regional (5)
Regional
(6)
PFTAC annual Steering
Committee meeting
Credit Union Pacific Congress
3
4
Presentation on PFTAC's
Activities Financial Institutions
Sector.
Staged two workshops;
Governance and
CU Financial stability
Host: Samoa
February 2016
Host Fiji
October 2015
80 Participants
7 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
Measurable Outcome
Country Progress against
Milestones at end-FY20157
Activity/Mission Description Person Days
Relevant Milestone Comments
PFTAC Annual Report 2016
Page | 89
Macroeconomic Statistics Logical Framework FY2016
Objective: More timely and reliable economic statistics
Measurable
Outcome
Country Progress against
Milestone at end-
FY2015
Activity/Mission Description Person
Days
Relevant Milestone Comments
4.1 At least 8 countries compile at least two independent measures of GDP
Fiji 2 National Accounts: Assist in the
development of 2011 supply-use
tables and review GDP estimates
by expenditure and income.
12 Sound methods in place. 2011
supply-use tables compiled.
Final balancing completed.
Samoa 2 National accounts expenditure
estimates review.
6 Work on second measure
nearly complete.
Resuming TA to Samoa after a
government- funded project.
4.2 Constant price GDP estimates are rebased at least every 10 years
Cook Islands 2 National accounts rebase and
methodology improvements.
12 Surveys and other data
sources available for rebase.
Focus changing from 4.4 to 4.2.
Solomon Is. 1 National Accounts: Incorporating
HIES data and rebasing constant
price accounts.
12 Base year less than 10 years
old, plans in place to keep it
thus.
This will take two missions to complete,
the second one in next fiscal year.
PNG 2 National Accounts: Strengthening
methodologies and assist with
rebasing GDP estimates in
constant prices. Assist with the
46 GDP estimates published. The PNG NSO needs substantial TA to
resume regular compilation of national
accounts. This is four missions including
February assuming adequate progress.
PFTAC Annual Report 2016
Page | 90
Measurable
Outcome
Country Progress against
Milestone at end-
FY2015
Activity/Mission Description Person
Days
Relevant Milestone Comments
NSO reform process.
4.3 At least 8 member countries compile regular annual GNI, GNDI, saving and net lending/borrowing aggregates
Fiji 2 National Accounts: Assist in the
development of 2011 supply-use
tables and review GDP estimates
by expenditure and income.
Sound methods in place. 2011
supply-use tables compiled.
(Refer to 4.1)
Kiribati 3 National Accounts: Strengthening
methodologies for the
compilation of GDP estimates by
production.
Sound methods in place.
(Refer to 4.5)
4.4 At least 4 countries compile quarterly national accounts
Fiji 2 National accounts: assist in the
development of quarterly GDP
estimates.
7 Country has QNA methodology
under development.
The aim is to publish by the end of March
2016.
4.5 Data sources are adequate and methodologies are sound
Cook Islands 2 National accounts rebase and
methodology improvements.
Surveys and other data
sources available for rebase. (Refer to 4.2)
Cook Islands 1 BOP: Current Account
development
Draft balance of payments
produced. Coverage and
methodology weak.
(Refer to 4.9)
PFTAC Annual Report 2016
Page | 91
Measurable
Outcome
Country Progress against
Milestone at end-
FY2015
Activity/Mission Description Person
Days
Relevant Milestone Comments
Fiji 2 National Accounts: Assist in the
development of 2011 supply-use
tables and review GDP estimates
by expenditure and income.
Sound methods in place. 2011
supply-use tables compiled.
(Refer to 4.1)
PNG 2 National Accounts: Strengthening
methodologies and assist with
rebasing GDP estimates in
constant prices. Assist with the
NSO reform process.
GDP estimates published. . (Refer to 4.2)
Tuvalu 2 National accounts update, review,
and training.
5 National accounts produced
but with major deficiencies.
Country compiler will travel to Suva.
Kiribati
3
National Accounts: Strengthening
methodologies for the
compilation of GDP estimates by
production and developing an
expenditure measure of GDP.
15
Sound methods in place.
Undertaken by an STX.
Solomon Is. 1 National Accounts: Incorporating
HIES data and rebasing constant
price accounts.
Base year less than 10 years
old, plans in place to keep it
thus.
(Refer to 4.2)
Niue 2 National accounts methodology
review and update.
14 National accounts produced
but with major deficiencies.
National accounts previously done by
SPC.
Samoa 2 National accounts expenditure
estimates review.
Work on second measure
nearly complete.
(Refer to 4.1)
PFTAC Annual Report 2016
Page | 92
Measurable
Outcome
Country Progress against
Milestone at end-
FY2015
Activity/Mission Description Person
Days
Relevant Milestone Comments
Tonga 2 Review national accounts
methodology especially fixed
ratios and use of tax data.
14 Adequate national accounts
produced but with some
deficiencies.
Introduce new STX to Pacific work.
Regional Training on national accounts for
FSM, Palau and RMI. Streamline
systems and simplify
methodologies to increase local
capacity.
10 Sound methods in place. Aim to reduce reliance on external
consultants.
Regional Analyze HIES data and develop
standard template of HIES output
for national accounts and BOP.
6 Sound methods in place. Meeting of the PSSC HIES working group.
Regional Participation in the Pacific
Statistics Steering Committee
which coordinates Statistics TA in
the region.
2 TA Coordination improved.
Phase II of the Ten Year Pacific
Statistics Strategy
implemented.
Coordination with the SPC which plays a
key role in the Committee has been
challenging.
4.6 National accounts statistics are consistent with other statistics including balance of payments and government finance statistics (GFS)
Cook Islands 2 Completion of GFS classifications,
data input.
17 Improvement of GFS New area. Previously IMF HQ.
FSM, Palau,
Marshall
islands
2 Inclusion of extra-budgetary units,
Social Security funds, Public
Corporations
15 Improvement of GFS Work similar for each country. Remote
input from STX.
PFTAC Annual Report 2016
Page | 93
Measurable
Outcome
Country Progress against
Milestone at end-
FY2015
Activity/Mission Description Person
Days
Relevant Milestone Comments
4.7 National accounts statistics and associated metadata are readily available.
Kiribati 3 National Accounts: Strengthening
methodologies for the
compilation of GDP estimates by
production and developing an
expenditure measure of GDP.
Sound methods in place.
(Refer to 4.5)
Niue 2 National accounts methodology
review and update.
National accounts produced
but with major deficiencies.
(Refer to 4.5)
4.8 Price statistics are of good quality and base years up to date.
Regional
2
Training course for compilers of
consumer price indexes.
21
CPI produced, imputations,
item replacement reasonable.
Course run jointly with SPC who take the
lead on price statistics in the region.
Training supplemented with a
component on the IMF HQ preferred
compilation software, using an STX.
4.9 Improvement in the coverage, quality and timeliness of balance of payments estimates.
Cook Islands 1 BOP: Current Account
development
36 Draft balance of payments
produced. Coverage and
methodology weak.
Two STX missions. Aim is to have
publishable current account.
Nauru 2 BOP update. 10 Draft Balance of payments
produced. Coverage and
methodology weak.
Follow-up STX mission. Nauru expected
to join IMF in February.
PFTAC Annual Report 2016
Page | 94
Macroeconomic Analysis Logical Framework FY2016
Objective: Improved macroeconomic analysis
Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
5.1 Integrated macroeconomic monitoring / projection processes
Cook Islands
4- Develop an integrated macroeconomic and fiscal framework.
9 Macroeconomic and fiscal projections are consistent.
The integrated model is less resource intensive to maintain.
Substantial progress was made due to high capacity of staff and joint collaboration.
Samoa 3 Review of tax revenue forecasting methodology used at the Ministry for Revenue and the Ministry of Finance.
7 Discrepancies between tax collection estimates and actual collections are reduced.
Macroeconomic and fiscal projections are consistent.
Facilitate a cross institution (Ministry of Finance, Ministry for Revenue, Central Bank of Samoa, Samoa Bureau of Statistics) workshop on the Samoa Economic and Revenue Forecasting (SERF) model and the compilation of government finance statistics.
7
Solomon Islands
3- Develop the fiscal sector of the Solomon Islands financial programming framework.
7 Macroeconomic and fiscal projections are consistent.
1 Ratings defined as follows: 1 = Very limited progress towards objective; 2 = Some progress towards objective; 3 = Substantial progress towards objective; 4 = Objective largely or fully achieved.
PFTAC Annual Report 2016
Page | 95
Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
Tonga 4- Develop a financial programming (FP) framework for Tonga.
10 A financial programming framework is developed and used in budget preparations and for policy advice and analysis.
A basic revenue forecasting tool is developed.
Technical assistance is provided jointly with the ADB.
The sharing of industry-level GDP forecasts by the Ministry of Finance and National Planning with the Ministry of Revenue and Customs sets a new standard in the region.
Facilitate a training workshop for staff from the Ministry of Finance and National Planning (MFNP), the Ministry of Revenue and Customs (MORC) and the Tonga Department of Statistics on practical applications of the Tonga FP framework.
8
Develop a revenue forecasting tool for MORC staff.
8
Support the use of the FP framework during budget processes and in preparations for the IMF Article IV.
19
Vanuatu 3 Conduct a cross institution (Department of Finance and Treasury (DOFT), Reserve Bank of Vanuatu (RBV), Vanuatu National Statistics Office) workshop on practical applications of the Vanuatu FP framework.
15 A financial programming framework is developed and used in policy advice and analysis.
A national framework for revenue forecasting is developed.
The development of the FP framework is greatly assisted by strong management support and high levels of cooperation between public sector agencies as well motivation and dedication by staff.
Develop gross domestic product (GDP) forecasting and monitoring methodology and train staff at the RBV and DOFT on using the FP framework.
7
Develop a national framework for tax revenue forecasting consistent with the FP framework.
7
5.2 Multi-year fiscal planning frameworks
Regional Participate in Workshop on Strengthening 16 Collaboration between institutions Workshops were organized
PFTAC Annual Report 2016
Page | 96
Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
Fiscal Frameworks in the Pacific Islands. is strengthened to better link development plans into budgets and to improve tax revenue forecasts.
Capacity is increased to undertake medium-term fiscal budgeting and planning.
Pension funds are fiscally sustainable in the long run.
Peer learning takes place and professional networks are formed in the region.
Countries’ priority areas are identified for follow-up bilateral technical assistance.
in collaboration with PFTAC’s PFM and Revenue Policy and Administration Advisors, the United Nations Economic and Social Commission for Asia and the Pacific, Pacific Office (UNESCAP), the Pacific Islands Tax Administrators Association (PITAA), and the Fiji Revenue and Customs Authority (FRCA).
Regional Facilitate two workshops on Medium-Term Expenditure Planning for National Sustainable Development.
18
Regional Facilitate two workshops on Tax Revenue Forecasting.
12
Regional Facilitate a workshop on Pension Issues. 9
PFTAC Annual Report 2016
Page | 97
ANNEX IV: PFTAC MISSIONS AND MEETINGS IN FY2016
Public Financial Management
Country Description Advisor Type Mission Days
RBM Codes
Cook Islands
Complete review of legal framework Phases 1 & 2 Short-term Expert
15 1.3
Final draft revised CI’s PFM legal framework Phase 3 Short-term Expert 12 1.3
Fiji Review of operations for Fiji National Provide Fund (Phase 1)
Short-term Expert 5 1.3
Improve budget document in line with international standards
Resident Advisor 3 1.8
Staff mentoring on accounting based on IPSAS Resident Advisor 2 1.8 Improve medium term focus of the annual
budget process Resident Advisor 7 1.6
FSM Introductory mission to improve treasury management
Resident Advisor 7 1.7
Kiribati PEFA Self Assessment Resident Advisor 13 1.1
Marshall Is. Strengthen capacity to operationalize PFM Reform Plan
Resident Advisor 5 1.7
Nauru Implementing instructions for budget execution consistent with FMIS
Short-term Expert 32 1.3
Self Assessment in conjunction with an Australia DFAT
Resident Advisor 6 1.1
Self Assessment in conduction with Australia DFAT
Resident Advisor 6 1.1
Papua New Guinea
Technical support for accelerated implementation of PNG’s new IFMIS
Short-term Expert 32 1.7,1.8
PEFA follow-up and Action Plan Development IMF 9 1.1,1.2
PEFA follow-up and PFM Roadmap Development IMF 9 1.1,1.2
PEFA follow-up and PFM Roadmap Development IMF 9 1.1,1.2
PEFA follow-up and PFM Roadmap Development Resident Advisor 7 1.1,1.2
Improve cash management (mission2) Short-term Expert 17 1.7
Follow-up on IFMS transformation Short-term Expert 39 1.7
Improve Cash Management Short-term Expert 24 1.7
Samoa Develop strategy on fiscal oversight for state-owned enterprises
Short-term ExpertResident Advisor
18 16
1.81.8
Improve cash management Short-term Expert 20 1.7
Strengthen accounting and reporting frameworks
Resident Advisor 12 1.8
Strengthen accounting and reporting frameworks
Short-term Expert 12 1.8
Solomon Islands
Support to APD’s 5th ECF Review Resident Advisor 3 1.6
Improve cash management Resident Advisor 12 1.7
Tonga PFM case study with World Bank and Australia DFAT
Resident Advisor 5 1.2,1.6
Improve reporting framework Resident Advisor 12 1.8
PFTAC Annual Report 2016
Page | 98
Country Description Advisor Type Mission Days
RBM Codes
Improve reporting framework Short-term Expert 12 1.8
Capacity-building Workshop for the Public
Accounts Committee
Short-term Expert 3 1.2
Tuvalu PEFA Self Assessment with Australia DFAT Assessment of National Systems
Short-term Expert 17 1.1,1.2
Tuvalu PEFA Self-Assessment Facilitation Resident Advisor 8 1.1,1.2
PEFA Self Assessment with Australia DFAT Assessment of National Systems
Resident Advisor 7 1.1,1.2
Vanuatu Strengthening Internal Audit Short-term Expert 20 1.7
PEFA Self-assessment & PFM Roadmap start Resident Advisor 12 1.1,1.2
PEFA Self-assessment & PFM Roadmap start Short-term Expert 16 1.1,1.2
PEFA Self-assessment & PFM Roadmap start Short-term Expert 14 1.1,1.2
Regional Enhancing Macroeconomic resilience to Natural Disasters and Strengthening Fiscal Frameworks
Resident AdvisorResident Advisor
5 5
1.61.6
Preparation for Deep Sea Minerals Workshop Short-term Expert 7 1.6
Deep Sea Minerals Workshop Short-term Expert 4 1.6
Deep Sea Minerals Workshop Resident Advisor 4 1.6
Finalizing Results Documents on DSM Fiscal Regime and Revenue Management for ACP States
Short-term Expert 6 1.6
Workshop on Fiscal Frameworks Resident Advisors 10 1.6
Sub regional workshop on pension issues Resident Advisor 15 1.6
Improve medium term focus of the annual budget process workshop
Resident Advisor 6 1.6
PASAI Workshop Resident Advisor 6 1.8
Revenue Policy and Administration
Country Description Advisor Type Mission Days
RBM Codes
Cook Islands
Improving core tax functions Short-term Expert 12 2.3
Fiji Risk management and self assessment Resident Advisor 5 2.5
Improving the audit function Short-term Expert 12 2.3
Strengthen the Filing of Tax Returns Short-term Expert 5 2.3
Compliance Improvement Strategy Short-term Expert 5 2.4
Compliance Improvement Strategy (1) Short-term Expert 10 2.4
Compliance Risk Management (2) Short-term Expert 12 2.4,2.5
Improving the audit function Short-term Expert 20 2.4
Implementation of strategic objectives Resident Advisor 5 2.5
Finalizing the Income Tax Bill Short-term Expert 5 2.2
Improving core tax functions Resident Advisor 2 2.3
Facilitating change management implementation Resident Advisor 7 2.9
PFTAC Annual Report 2016
Page | 99
Country Description Advisor Type Mission Days
RBM Codes
Designing a modernization change management
plan
Short-term Expert 12 2.9
Compliance Risk Management (3) Short-term Expert 15 2.5
FSM Compliance Risk Management (1) Short-term Expert 19 2.4,2.5
Compliance Risk Management (2) Short-term Expert 20 2.4,2.5
Review overall reform Resident Advisor 4 2.4,2.5
Kiribati Improving core tax functions(2) Short-term Expert 21 2.3
Assist in the implementation of a new organization structure
Short-term Expert 20 2.7
Reviewing VAT Implementation Short-term Expert 12 2.3
Review overall reform progress/develop strategic plan
Resident Advisor 7 2.3
Marshall Is. Review overall reform Resident Advisor 4 2.4,2.5
Strengthen core tax functions Short-term Expert 15 2.3
Implementation of VAT Short-term Expert 15 2.3
Nauru To assist the authorities finalize the Business Tax Bill
IMF-Legal 10 2.2
To assist the authorities finalize the Business Tax Bill
IMF 4 2.2
Palau Review overall progress and determine future TA Resident Advisor 8 2.4,2.5
Strategic Planning/Compliance Risk Management Short-term Expert 28 2.7
Facilitate implementation of a new organization structure
Short-term Expert 12 2.7
Samoa Compliance Risk Management Short-term Expert 16 2.4
Strengthen Arrears and Returns Management Short-term Expert 12 2.3
Review overall reform progress Resident Advisor 6 2.3
Tonga Self Assessment and Compliance Risk Management (1)
Short-term Expert 18 2.4,2.5
Adopting a Function Structure – Phase 1 Short-term Expert 14 2.7
Review overall reform progress Resident Advisor 5 2.3
TA in Fiscal Law IMF 10 n.a.
Tuvalu Review overall reform progress Resident Advisor 10 2.5
Vanuatu Compliance Risk Management Resident Advisor 6 2.5
Improving core tax functions Short-term Expert 12 2.3
TA in Fiscal Law : VAT IMF 5 n.a
Regional Measuring Tax Administration Performance Workshop
Short-term Expert 14 2.3
Measuring Tax Administration Performance Workshop
Short-term Expert 14 2.3
Measuring Tax Administration Performance Workshop
IMF 9 2.3
Deep Sea Minerals Workshop Short-term Expert 4 2.2
Finalizing Results Documents on DSM Fiscal Regime and Revenue Management for ACP Countries
Short-term Expert 5 2.2
Arrears and Debt Collection Workshop Short-term Expert 5 2.3
PFTAC Annual Report 2016
Page | 100
Country Description Advisor Type Mission Days
RBM Codes
Pacific Islands Tax Administrators Annual Meeting Short-term Experts
6 n.a.
Pacific Islands Tax Administrators Annual Meeting Resident Advisor 3 n.a.
Pacific Islands Tax Administrators Annual Meeting IMF 3 n.a.
Workshop on Management of the Audit Function Short-term Expert 14 2.3
Workshop on Management of the Audit Function Resident Advisor 1 2.3
Workshop on Management of the taxpayer services function
Short-term Expert 5 2.3
Annual Oceania Customs Organization Meeting Resident Advisor 3 2.4,2.5
Workshop on Revenue Forecasting (1) Resident Advisor 5 2.8
Workshop on Compliance Risk Management Short-term Expert 5 2.5
Workshop on Compliance Risk Management Short-term Expert 5 2.5
Improving Tax Compliance in the Tourism Industry
Short-term Expert 5 2.4
PFTAC Steering Committee Meeting Resident Advisor 3 n.a.
Workshop on Revenue Forecasting (2) Resident Advisor 5 2.8
Financial Sector Supervision
Country Description Advisor Type Mission Days
RBM Codes
Cook Islands On-site examination of a commercial Bank Resident Advisor 11 3.4
Fiji Capacity Building; Supervisory Oversight and sector financial reporting , Credit Unions
Resident Advisor 15 3.9
Credit Union Law Workshop Credit Union Law Workshop
Resident AdvisorIMF
7 7
3.93.9
FSM Support Banking Commission with public consultation (Credit Union Act) On-site examination of a commercial bank
Resident Advisor Short term expert
10
15
3.9
3.4,3.5
Marshall Is. Capacity building: Supervisory oversight and sector financial reporting, credit unions
Resident Advisor 15 3.9
Palau On-site examination of a commercial Bank Capacity building: Supervisory oversight and sector financial reporting, Credit Unions
Short-term Expert Resident Advisor
12 15
3.4,3.5 3.9
Papua New Guinea
Workshop Consolidated Supervision of Conglomerates
Short-term Expert
5
3.4
Samoa On-site examination of a commercial Bank Short-term Expert 19 3.4,3.5
On-site examination of a commercial Bank Short-term Expert 18 3.4,3.5
Capacity Building Supervisory oversight and sector financial reporting, credit unions
Resident Advisor 12 3.9
Solomon Is. Capacity building; Supervisory oversight and sector financial reporting, credit unions
Resident Advisor 15 3.4,3.5
Timor Leste Examination Preparedness Workshop Short-term Expert 11 3.3,3.4.3.5
On-site examination of a commercial Bank Short-term Expert 19 3.4,3.5
Tonga Review of Prudential Guidelines/desk review Short-term Expert 17 3.8
On-site examination of a commercial Bank Resident Advisor 15 3.4,3.5
On-site examination of a commercial Bank Resident Advisor 11 3.4,3.5
Capacity Building: Supervisory Oversight and sector Resident Advisor 10 3.8
PFTAC Annual Report 2016
Page | 101
Country Description Advisor Type Mission Days
RBM Codes
financial reporting, credit unions
Tuvalu Setting up a banking commission and Financial reporting
Resident Advisor 3 3.8
Vanuatu Post natural disaster banking sector assessment/supervision strategy
Resident Advisor 4 3.4
Regional Credit Union Congress Presentations; Governance & Financial stability
Resident Advisor 4 3.9
Examination Preparedness Workshop (Northern Region)
Short-term Expert 8 3.4,3.5
Examination Preparedness Workshop (Northern Region)
Resident Advisor 7 3.4,3.5
Annual Governor’s meeting Resident Advisor 3 3.10
Association of Financial Supervisors of Pacific Countries Annual Meeting (AFSPC)
Resident Advisor 7 3.10
Association of Financial Supervisors of Pacific Countries Annual Meeting and Workshop on Governance
Short-term Expert 3 3.4
Workshop : TA needs assessment questionnaire IMF 5 3.4
Pacifica Microfinance Conference Resident Advisor 7 3.9
PFTAC Steering Committee Meeting Resident Advisor 4 3.10
Macroeconomic Statistics
Country Description Advisor Type Mission Days
RBM Codes
Cook Islands Balance of Payments Statistics Short-term Expert 19 4.5,4.6,4.9
National Accounts: Rebase & Methodology Improvements
Resident Advisor 12 4.2,4.5
Balance of Payments Statistics Short-term Expert 17 4.5,4.6,4.9
Government Finance Statistics Short-term Expert 17 4.6
Fiji National Accounts: Assist in the development of 2011 supply-use tables
Resident Advisor 12 4.1,4.3,4.5,4.6
CPI Compilation System Training Short-term Expert 5 4.8
Quarterly National Accounts: Training & Publication Resident Advisor 5 4.4
FSM Government Finance Statistics: Development and Training
Short-term Expert 5 4.6
Kiribati National Accounts in updating the GDP estimates Short-term Expert 7 4.3,4.5,4.7
Marshall Is. Government Finance Statistics: Development and Training
Short-term Expert 5 4.6
Nauru Balance of Payments Statistics: Compilation of 2014-15 Estimates and IIP
Short-term Expert 10 4.9
National Accounts: Compilation of GDP estimates by production & methodology improvements
Resident Advisor 8 4.5
Niue National Accounts: Methodology Review and NA Update
Resident Advisor 14 4.5, 4.6, 4.7
Palau Government Finance Statistics: Development and Training
Short-term Expert 5 4.6
Papua New Guinea
National Accounts Statistics Resident Advisors (2)
22 4.2,4.5,4.6
National Accounts: Methodologies and assist with reform process
Resident Advisor 12 4.2,4.5,4.6
PFTAC Annual Report 2016
Page | 102
Country Description Advisor Type Mission Days
RBM Codes
Samoa Training: National Accounts Training: National Accounts
Resident AdvisorResident Advisor
3 3
4.1, 4.54.1, 4.5
Solomon Is. National Accounts: Rebasing of estimates in constant prices
Resident Advisor 11 4.2,4.5
Tonga National Accounts: Annual Methodology and Review of 2014-15 annual GDP estimates
Resident Advisor Resident Advisor
7 7
4.5,4.6 4.5,4.6
Tuvalu National Accounts: Update, Review and Training Resident Advisor 5 4.5,4.6
Regional Participation in the Pacific Steering Committee (1) Resident Advisor 1 4.5,
Quality Adjustments and Item Substitution in the Consumer Price Index
Resident Advisor 2 4.8
Quality Adjustments and Item Substitution in the Consumer Price Index
Short-term Expert 14 4.8
National Accounts: Training & Methodology Improvements
Resident Advisor 5 4.5
National Accounts: Training & Methodology Improvements
Resident Advisor 5 4.5
HIES technical working group with TA provider Resident Advisor 3 4.5,4.9
HIES technical working group with TA provider Resident Advisor 3 4.5,4.9
Training: Course for Compilers from PNG and Solomon Islands Training: Course for Compilers from PNG and Solomon Islands
Resident AdvisorResident Advisor
10 10
4.2,4.5,4.64.2,4.5,4.6
PFTAC Steering Committee Meeting PFTAC Steering Committee Meeting
Resident Advisor Resident Advisor
4 4
n.a. n.a.
Macroeconomic Analysis and Forecasting
Country Description Advisor Type Mission Days
RBM Codes
Cook Islands
Develop an integrated macroeconomic and fiscal framework
Resident Advisor 9 5.1-5.3
Kiribati Support authorities during the 2015 IMF Article IV consultation; discuss authorities’ priorities and needs and identify areas for PFTAC technical assistance and training going forward
Resident Advisor 11 n.a.
Samoa Review of tax revenue forecasting methodology used at the Ministry for Revenue and the Ministry of Finance
Resident Advisor 7 5.1
Enhance the SERF model’s ability to undertake debt sustainability analysis
Resident Advisor 7 5.1
Solomon Islands
Develop the fiscal sector of the Solomon Islands financial programming framework
Short-term Expert 10
5.1, 5.3
Tonga Develop a financial programming (FP) framework for Tonga
Resident Advisor 10 5.1
Facilitate a training workshop for staff from the Ministry of Finance and National Planning (MFNP), the Ministry of Revenue and Customs (MORC) and the Tonga Department of Statistics on practical applications of the Tonga FP framework
Resident Advisor 8 5.1, 5.2
PFTAC Annual Report 2016
Page | 103
Country Description Advisor Type Mission Days
RBM Codes
Develop a revenue forecasting tool for MORC staff and operationalize the MFNP FP framework
Resident Advisor 8 5.1
Support the use of the FP framework during budget preparations
Short-term Expert 11 5.1
Continue developing the revenue forecasting tool; support the use of the FP framework in preparations for the IMF Article IV
Resident Advisor 8 5.1
Vanuatu Conduct a cross institution (Department of Finance and Treasury (DOFT), Reserve Bank of Vanuatu (RBV), Vanuatu National Statistics Office) workshop on practical applications of the Vanuatu FP framework
Resident Advisor 15 5.1, 5.2
Develop gross domestic product (GDP) forecasting and monitoring methodology and train staff at the RBV and DOFT on using the FP framework
Resident Advisor 7 5.1
Develop a national framework for revenue forecasting consistent with the FP framework
Resident Advisor 7 5.2
Develop a debt management tool Short-term Expert 11 5.2, 5.3
Regional Participate in a High Level Dialogue Meeting on Enhancing Resilience to Natural Disasters in Pacific Islands and a Workshop on Strengthening Fiscal Frameworks in the Pacific Islands
Resident Advisor
Short-term Expert
6
12
5.2, 5.4
Participate in a workshop on The Economics of Climate Change
Resident Advisor 2 5.4
Facilitate two workshops on Medium-Term Expenditure Planning for National Sustainable Development
Resident Advisor
Short-term Expert
12
6
5.2
5.2
Facilitate two workshops on Tax Revenue Forecasting
Resident Advisor 12 5.2
Facilitate a workshop on Pension Issues Resident Advisor 9 5.2
2016 Steering Committee Meeting Resident Advisor 4 n.a.
Meetings, Seminars and Training in FY2016
TA Sector Description Location Number of participants
PFM Preparation for Deep Sea Minerals Workshop Fiji 36
Deep Sea Minerals Workshop Fiji 36
Sub regional workshop on pension issues Marshall Is. 15
Medium-Term Expenditure Planning for National Sustainable Development (2)
Fiji 33
PASAI Workshop Fiji 32
Revenue Measuring Tax Administration Workshop Fiji 25
Deep Sea Minerals Workshop Fiji 36
Arrears and Debt Collection Workshop Fiji 18
Pacific Islands Tax Administration Annual Meeting PNG 35
PFTAC Annual Report 2016
Page | 104
TA Sector Description Location Number of participants
Management of the Audit Function Workshop Fiji 23
Management of the Taxpayer Services Function Workshop Fiji 21
Annual Oceania Customs Organization Palau 30
Workshop on Compliance Risk Management Fiji 20
Tax Revenue Forecasting (2) Fiji 44
Financial Supervision Examination Preparedness Workshop Guam 8
Association of Pacific Countries Annual Meeting Solomon Is. 15
Workshop on Governance Audit Solomon Is. 15
Workshop on TA Needs assessment questionnaire Solomon Is. 15
Credit Union Congress Presentations: Governance and Financial Stability
Fiji 80
Workshop: Fiji Credit Union Act with IMF Legal Department Workshop: Regional Credit Union Act with Legal Department
Fiji Fiji
12 10
Statistics Training Course for Compliers for PNG and Solomon Islands PNG 16
Quality Adjustments and Item Substitution in the Consumer Price Index
Fiji 20
National Accounts: Training & Methodology improvements FSM 20
Macroeconomics The Economics of Climate Change Taipei 30
Medium-Term Expenditure Planning for National Sustainable Development (2)
Fiji 33
Tax Revenue Forecasting (2) Fiji 44
Sub regional workshop on pension issues Marshall Is. 15
IMF/PFTAC High Level Dialogue Meeting on Enhancing Resilience to Natural Disasters in Pacific Islands and Workshops on Strengthening Fiscal Frameworks in the Pacific Islands
Fiji 80
PFTAC Steering Committee Meeting Samoa 55
PFTAC Annual Report 2016
Page | 105
ANNEX V: PFTAC RESULTS-BASED MANAGEMENT LOGICAL FRAMEWORK FY2017
Objective: Improved economic management and economic growth in the Pacific Islands
Regional Program
Objective Verifiable Indicators Progress on Indicators
General
Risks/Assumptions/ Risk
Mitigation 1. Improved public
financial
management.
Progress relative to the May 2014 baseline, as
measured by the “Percent of Members with Repeat
PEFAs showing Improvement or No Change with an
A or B rating in both years”:
the 4 indicators for “Credibility of the Budget”
the 6 indicators for “Comprehensiveness and
Transparency”
2 indicators (#11 & 12) for “Policy-Based Budgeting”
The 4 indicators for “Accounting, Recording, and Reporting”
The 3 indicators for “External Scrutiny and Audit”
Improvements in PFM systems noted in other
qualitative assessments.
All but 2 of the PFTAC countries have now had at least 1
formal PEFA Assessment, but both of these have been
through a PFTAC coordinated self-assessment.
PFTAC has constructed a database of indicators used to
monitor PFM progress.
Summaries of up-to-date PEFA results will be presented in
PFTAC’s Annual Reports and will be reported to FEMM on a
periodic basis.
As of February 2016, 8 PFTAC Members have had repeat
PEFA Assessments. Since the FY2015 Annual Report, only
the Cook Islands and PNG have undergone an external
PEFA,. Preliminary results, suggest improvements in several
areas
Requires political commitment
to implementing PFM reform
roadmaps.
Sustained progress is
dependent on broader reforms
to the public sector, including
recruitment, retention and
remuneration.
Coordinated development
partner financial and technical
support required for
implementation of PFM
reforms.
2. Broader-based and
more efficient revenue
systems.
Improved ratio of tax collected to administration
expenses.
Improved rankings on benchmarking of regional tax
administrations.
IMF's RA-FIT first cut of data has been finalized and a
second round is now in process. The results will be
published on the database.
PITAA benchmarking is conducted bi-annually and the next
Political commitment to tax
reform and adequate
resourcing of tax
administrations are essential
for improved revenue
PFTAC Annual Report 2016
Page | 106
Regional Program
Objective Verifiable Indicators Progress on Indicators
General
Risks/Assumptions/ Risk
Mitigation round will be completed at the end of the PFTAC program
cycle.
collections.
3. Increased resolution
and minimization of
the risk factors
identified in the
financial system.
Timely assessment of the condition and performance
of individual banks and the overall banking system
by supervisory authorities.
Increased frequency of on-site examinations of
financial institutions.
Greater compliance with Basel Core Principles across
the Pacific.
Central Banks and supervisory authorities currently
maintain adequate off-site data on the condition of the
banking system and timeliness and quality of the data
continue to be enhanced with the completion of the
prudential returns program.
Off-site supervision is performed by most jurisdictions. On-
site examinations are performed by all regulatory
authorities and most are planning to upgrade the level of
and intensity of the examinations curriculum with the
support of PFTAC through a defined on-site examination
program.
The credit union sector in most countries is expected to be
enhanced through a comprehensive review of legislation
and capacity building of the oversight regime.
Adequate financial and staff
resources needed in
supervisory institutions.
4. More timely and
reliable economic
statistics.
Improvement in PIC statistical capacity indicator
scores;
Improved GDDS participation and compliance.
Increased quarterly publication of GDP and
expenditure measures.
Statistical capacity indicators will be monitored through the
World Bank's public database.
Since the start of Phase IV, 7 more countries have begun
participation in the GDDS initiative. An IMF project will
focus on improving participation in the GDDS in Papua New
Guinea, Samoa, and Timor Leste.
Methodology improvements in second GDP measures
continued in a number of countries should also enable
publication of GDP estimates by expenditure in Fiji and
Kiribati and the compilation of quarterly GDP estimates in
Requires political commitment
and sufficient resourcing of
NSOs and other statistical
agencies.
Increased and better
coordinated development
partner assistance required for
continued progress through the
implementation of the phase II
of the Ten Year Pacific Statistics
PFTAC Annual Report 2016
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Regional Program
Objective Verifiable Indicators Progress on Indicators
General
Risks/Assumptions/ Risk
Mitigation Fiji. Methodologies and GDP estimates by expenditure
should be improved in Papua New Guinea following re-
engagement with the national statistics office in
collaboration with the Australian Bureau of Statistics.
Strategy supported by a
regional coordination unit and
strengthened by several
working groups.
5. Improve overall
quality of analysis
underlying
macroeconomic policy.
5.1 Development of integrated macroeconomic
monitoring / projection process.
5.2 Development of multi-year fiscal planning
framework.
5.3 Ability to assess debt sustainability.
5.4 Incorporate disaster risks into fiscal planning
process.
5.1 Many countries have started to use financial
programming frameworks; further training needed to help
staff use the frameworks effectively.
5.2 Few countries routinely analyze fiscal planning beyond
a two-year budget horizon.
5.3 Few countries are able conduct their own debt
sustainability assessments.
5.4 Countries have some procedures and measures in place
but lack a comprehensive approach.
Requires political commitment
to transparency of economic
information.
Staffing and resourcing of
economic units required.
Dependant on data availability
and quality.
Requires closer coordination
between and within
institutions.
PFTAC Annual Report 2016
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Public Financial Management Logical Framework FY20171
Objective: Improved public financial management
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
1.0 Improved planning, prioritizing, monitoring, and evaluation of PFM reforms.
1.1 At least 1 PEFA assessment conducted in each PFTAC country during the funding cycle with significant country staff involvement and ownership
1.2 Priority Reform road maps developed with significant involvement and ownership by country officials following each PEFA assessment
Kiribati Objective: Guide country staff to develop
and agree to a PFM Reform Roadmap
Output: PFM Reform Roadmap adopted by
the Government
IV LTX: 7
IV STX: 21
Milestone 3: Number of
PFM reform roadmaps
developed
Nauru Objective: Guide country staff to develop
and agree to a PFM Reform Roadmap
Output: PFM Reform Roadmap adopted by
the Government
V LTX: 7
V STX: 21
Milestone 3: Number of
PFM reform roadmaps
developed
1 The PFM logical framework for the FY2017 will be revised in the Phase V program document to reflect a set of RBM objectives, outcomes and measurable indicators that the
Fund has established and agreed to.
2 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely
or fully achieved.
3 "IV" indicates funding from Phase IV; "V" is an estimate for Phase V
PFTAC Annual Report 2016
Page | 109
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
Vanuatu Objective: Guide country staff to develop
and agree to a PFM Reform Roadmap
Output: PFM Reform Roadmap adopted by
the Government
V LTX: 7
V STX: 11
Milestone 3: Number of
PFM reform roadmaps
developed
2.0 Strengthening staff and institutional capacity
Regional 1
2017 Annual PFTAC Steering Committee Meeting Objective: Formulate annual work plan Output: Proposed work plan for approval
by Steering Committee
V LTX: 8
Staff trained on
various PFM functions
and sustained
participation in
development partners
forum.
Participation in
Steering Committee
meeting
Regional 1
Objective: Strengthen fiscal resilienceOutput: Workshop on strengthening fiscal
resilience
V LTX: 14 Participation in HQ-
initiated workshop
Regional 1
Objective: Strengthen regional coordination Output: Participation in regional forum
V LTX: 10 Participation in Pacific
forum
3.0 Progressive implementation of reform roadmaps, including strengthened (a) legal frameworks, (b) fiscal and budget integration and planning, (c )budget execution,
monitoring, reporting and accountability, (d) budget transparency, and (e) debt, asset, and risk management.
3.1 Governments approve changes to legal frameworks or financial instructions in order to achieve PFM in line with recognized good international practices
Fiji Objective: FI revision after FMA adoption
Output: Revised Financial Instructions
IV LTX: 0
IV STX: 0
V LTX: 4
V STX: 21
Milestone 4: Number
of countries with
identified legal
obstacles (in law or
financial instructions)
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
to implementing good
PFM practice who
were provided TA for
improvements.
Nauru Objective: FI preparation
Output: Revised Financial Instructions
IV LTX: 0
IV STX: 0
V LTX: 0
V STX: 30
Milestone 5: % of
assisted countries
adopting and
implementing
recommended
changes
Solomon
Islands
Objective: FI preparation
Output: Revised Financial Instructions
IV LTX: 0
IV STX: 0
V LTX: 0
V STX:19
Regional Objective: Desk review of PIC PFM laws to
identify provisions in existing law that
could be obstacles to implementation of
disciplined PFM, and preventing
implementation thru modifications to
Financial Instructions
Output: Report identifying PICs with the
greatest need for modifications in their
PFM laws
IV LTX: 0
IV STX: 0
V LTX: 0
V STX: 30
(WFH)
Milestone 4: Number
of countries with
identified legal
obstacles (in law or
financial instructions)
to implementing good
PFM practice who
were provided TA for
improvements.
Milestone 5: % of
assisted countries
adopting and
implementing
recommended
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
changes
3.2 Budgeting becomes more comprehensive, transparent, policy-based, integrated with planning and with a medium-term orientation, timely, and reliable, in
accordance with international standards.
Fiji 3 Objective: Continued refinement of budget
documents and process
Output: Improved program/activity level
narratives in detailed budget documents
explaining policy or demographic reasons
for funding changes; greater emphasis on
medium-term issues; and improved
estimates of medium-term expenditures
IV LTX: 5
V LTX: 5
Milestone 16: Budget
process is orderly and
allows adequate time
for meaningful
participation by line
ministries, Cabinets,
and Parliaments.
Milestone 17: Budget
process shows evidence
of a multi-year
perspective in fiscal
planning, expenditure
policy and budgeting.
Sub-regional Objective: Workshop on Expenditure
Planning & Budget Documentation for PICs
with Jan-Dec financial years
Output: Participants identify the
programs/activities in their countries'
budgets that will face medium-term cost
pressures from demographic flows, past
Cabinet/Parliament decisions, and attempt
IV LTX: 0
IV STX: 0
V LTX: 5
V STX: 0
Milestone 16: Budget
process is orderly and
allows adequate time
for meaningful
participation by line
ministries, Cabinets,
and Parliaments.
Milestone 17: Budget
process shows evidence
With macro advisor,
ADB, PIFS, UNESCAP
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
rough estimates of future cost adjustments
that may be required because of those
factors as well as costs of crucial reserves.
of a multi-year
perspective in fiscal
planning, expenditure
policy and budgeting.
Sub-regional Objective: Workshop on Expenditure
Planning & Budget Documentation for PICs
with other financial years
Output: Participants identify the
programs/activities in their countries'
budgets that will face medium-term cost
pressures from demographic flows, or past
Cabinet/Parliament decisions, and attempt
rough estimates of future cost adjustments
that may be required because of those
factors as well as costs of crucial reserves.
IV LTX: 0
IV STX: 0
V LTX: 5
V STX: 0
Milestone 16: Budget
process is orderly and
allows adequate time
for meaningful
participation by line
ministries, Cabinets,
and Parliaments.
Milestone 17: Budget
process shows evidence
of a multi-year
perspective in fiscal
planning, expenditure
policy and budgeting.
With macro advisor,
ADB, PIFS, UNESCAP
3.3 NTR Management implemented according to international best practices.
Solomon
Islands
2 Objective: Introduce basic principles and
good practices on NTR management
Output: Staff trained on NTR review
V: STX: 14 NTR policies, rates and
collections are regularly
reviewed as part of the
annual budget process,
in consultation with key
stakeholders.
Scoping mission was
initiated in 2014.
PNG 1 Objective: Introduce basic principles and V LTX: 0 NTR policies, rates and
PFTAC Annual Report 2016
Page | 113
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
good practices on NTR management
Output: Strategy recommendations on
improving NTR management
V STX: 14 collections are regularly
reviewed as part of the
annual budget process,
in consultation with key
stakeholders.
3.4. Budget execution controls are improved according to international standards.
Marshall Islands 1 Objective: Strengthen Internal Control
Output: Strategy recommendations to
improve design of treasury processes
starting with payroll
IV: LTX: 0
IV STX: 0
V: STX: 14
20. Personnel database
and payroll are directly
linked to ensure data
consistency and
monthly reconciliation.
Scoping mission is
planned on end of
March 2016.
3.5 Cash management is improved according to international standards.
PNG 2 Objective: Review/support cash
management reform
Output: TA to improve staff skills on cash
forecasting and develop system for cash
consolidation
IV LTX: 0
IV STX: 28
V LTX: 0
V STX: 14
Milestone 18:
Ministries are provided
good cash flow
information on the
periodic availability of
funds for commitment
of expenditures
Initial TA was
provided in 2015 and
authorities adopted a
new cash
management
strategy
Samoa 2 Objective: Strengthen cash forecasting
Output: Training on use of cash forecasting
model; TA on cash consolidation
IV STX: 7
Milestone 18:
Ministries are provided
good cash flow
information on the
periodic availability of
Initial TA was
provided in 2015 and
authorities adopted a
new cash
management
PFTAC Annual Report 2016
Page | 114
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
funds for commitment
of expenditures
strategy
Solomon
Islands
1 Objective: Strengthen cash management
Output: TA to improve cash management
strategy
V: LTX: 14
V STX: 14
Milestone 18:
Ministries are provided
good cash flow
information on the
periodic availability of
funds for commitment
of expenditures
3.6 Internal Audit is operational covering major central government entities, and generally meets international standards
Vanuatu 3 Objective: Strengthen internal audit
Output: TA to improve risk-based auditing
V STX: 14 23. Action by
management on
internal audit findings
is prompt and
comprehensive across
central government
entities.
Initial TA was provided
in 2014 and 2015, and
there has been good
progress which
resulted to improved
performance in 2015
PEFA self-assessment.
3.7 : Accounting, Fiscal Monitoring, and Reporting improves in line with international standards
Fiji 1 Objective: Strengthen transparency and
accountability in fiscal reporting
Output: TA to improve Chart of Accounts
IV: LTX: 5
IV: STX: 0
V: STX: 21
27. A consolidated
government financial
statement is prepared
annually according to
internationally
This is one
component of the
government’s
Accounting Reform
Roadmap
PFTAC Annual Report 2016
Page | 115
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
acceptable standards;
submitted to external
audit within 6 months
of fiscal year end, and
includes full information
on revenue,
expenditure and
financial
assets/liabilities.
Fiji 2 Objective: Strengthen transparency and
accountability in fiscal reporting
Output: Staff mentoring in implementing
IPSAS
IV: LTX: 7
V: LTX: 10
27. A consolidated
government financial
statement is prepared
annually according to
internationally
acceptable standards;
submitted to external
audit within 6 months
of fiscal year end, and
includes full
information on
revenue, expenditure
and financial
assets/liabilities.
Significant progress
was implemented,
but would still need
guidance. Initial TA
was provided in
December 2013 and
follow-up TA
provided in 2015
Sub-regional Objective: Strengthen transparency and
accountability in fiscal reporting
Output: Workshop to improve Chart of
Accounts and accounting policies
IV LTX: 7
IV STX: 12
V LTX: 0
V STX: 0
27. A consolidated
government financial
statement is prepared
annually according to
internationally
Priority participants
will include Fiji,
Samoa, Solomon
Islands, PNG, Tonga
PFTAC Annual Report 2016
Page | 116
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
acceptable standards;
submitted to external
audit within 6 months
of fiscal year end, and
includes full
information on
revenue, expenditure
and financial
assets/liabilities.
Sub-regional Objective: Strengthen transparency and
accountability in fiscal reporting
Output: Workshop to improve Chart of
Accounts and accounting policies
IV LTX: 7
IV STX: 12
V LTX: 0
V STX: 0
27. A consolidated
government financial
statement is prepared
annually according to
internationally
acceptable standards;
submitted to external
audit within 6 months
of fiscal year end, and
includes full
information on
revenue, expenditure
and financial
assets/liabilities.
Priority participants
will include Fiji,
Samoa, Solomon
Islands, PNG, Tonga
Tonga 1 Objective: Strengthen transparency and
accountability in fiscal reporting
Output: Follow-up TA to improve
accounting and financial reporting
IV LTX:0
IV STX:0
V LTX: 12
V STX:0
27. A consolidated
government financial
statement is prepared
annually according to
internationally
Initial TA is scheduled
on January 2016.
PFTAC Annual Report 2016
Page | 117
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
acceptable standards;
submitted to external
audit within 6 months
of fiscal year end, and
includes full
information on
revenue, expenditure
and financial
assets/liabilities.
Sub-regional 2 Objective: Strengthen transparency and
accountability in fiscal reporting
Output: Workshop jointly with PASAI on
accounting and auditing reform
IV LTX: 7
IV STX: 0
V LTX: 7
V STX: 0
27. A consolidated
government financial
statement is prepared
annually according to
internationally
acceptable standards;
submitted to external
audit within 6 months
of fiscal year end, and
includes full
information on
revenue, expenditure
and financial
assets/liabilities.
This will be for 2nd
batch of country
participants. The first
batch was conducted
in November, 2015.
PFTAC Annual Report 2016
Page | 118
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
PNG 3 Objective: Review/support IFMS
implementation enhancements progress
Output: steady increases in IFMS coverage
of additional departments at national and
provincial levels
IV LTX: 0
IV STX: 15
V LTX: 0
V STX: 30
Milestone 20:
Personnel database and
payroll are directly
linked to ensure data
consistency and
monthly reconciliation.
Milestone 22:
Comprehensive
expenditure
commitment controls
are in place and
effectively limit
commitments to actual
cash availability and
approved budget
allocations
Cook Islands Objective: Support planning for IFMS
change
Output: Conceptual design for a centralized
IFMS
IV LTX: 0
IV STX: 0
V LTX: 14
V STX: 14
Milestone 20:
Personnel database and
payroll are directly
linked to ensure data
consistency and
monthly reconciliation.
Milestone 22:
Comprehensive
expenditure
commitment controls
are in place and
PFTAC Annual Report 2016
Page | 119
Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
effectively limit
commitments to actual
cash availability and
approved budget
allocations
Kiribati Objective: Support planning for IFMS
change
Output: Government decides to replace
current IFMS with one designed for
government PFM
IV LTX: 0
IV STX: 0
V LTX: 0
V STX: 28
Milestone 20:
Personnel database and
payroll are directly
linked to ensure data
consistency and
monthly reconciliation.
Milestone 22:
Comprehensive
expenditure
commitment controls
are in place and
effectively limit
commitments to actual
cash availability and
approved budget
allocations
3.8 Debt Strategy (Note: No activities planned for FY2017)
3.9 A clear fiscal oversight framework for AGAs, SOEs, and SNGs is significantly implemented according to international standards .
Fiji 1 Objective: Strengthen transparency and
accountability in fiscal reporting
Output: TA to develop fiscal risk
IV LTX: 14
IV: STX: 0
V STX: 14
13.Fiscal Policy includes
AGAs, SOEs, and SNGs;
performance and fiscal
risks are monitored and
.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20162
Activity/Mission Description Person Days3
Relevant Milestone Comments
assessment framework on loan guarantees
and on-lending
reported, at least on
annual basis ;
Samoa 2 Objective: Strengthen fiscal oversight of
SOEs
Output: Follow-up TA to develop and pilot
risk assessment framework
IV LTX: 14
IV STX: 14
V: STX: 0
13. Fiscal Policy includes
AGAs, SOEs, and SNGs;
performance and fiscal
risks are monitored and
reported, at least on
annual basis
Initial TA provided in
September 2015
where a reform
strategy was
developed and
adopted by
authorities.
Sub-regional 1 Objective: Strengthen fiscal oversight of
SOEs
Output: Workshop on fiscal oversight of
SOEs
V: LTX: 7
V: STX: 12
Same as above Priority countries will
be those that
indicated similar
activity in their
Reform Roadmap
PFTAC Annual Report 2016
Page | 121
Revenue Policy and Administration FY2017
Objective: Broader-based and more efficient revenue systems
Measurable Outcome
Country Progress against Milestones at end-FY20151
Activity/Mission Description Person Days
Relevant Milestone Comments
2.1 Strengthen revenue administration management and governance arrangements (reform strategy and governance framework, organizational arrangements, support
functions, oversight and internal controls, risk management, administrative procedures and dispute resolution).
Fiji
Kiribati
2
2
Objective: New organizational
arrangements institutionalized to
support the PFTAC facilitated risk based
Compliance Improvement strategy.
Outcome: The management of
compliance risks results in higher levels
of voluntary compliance and
community confidence in the tax
system.
Objective: Strengthen revenue
administration management by
192
19
Risk based compliance
improvement strategy
institutionalized and supported
by a governance framework in
line with the TADAT
dimensions.
Risk based compliance
improvement strategy
Fiji has implemented a risk
based compliance plan, created
a risk management unit and
strengthened management
arrangements. An additional STX
(1) mission will further assist in
embedding the risk
management approach.
Kiribati has introduced a new
structure with the next phase of
1 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely
or fully achieved. 2 Person days include preparation, mission days and travel.
PFTAC Annual Report 2016
Page | 122
Measurable Outcome
Country Progress against Milestones at end-FY20151
Activity/Mission Description Person Days
Relevant Milestone Comments
Palau
Vanuatu
2
3
implementing a compliance
management framework.
Outcome: The management of
compliance risks resulting in higher
levels of voluntary compliance and
community confidence in the tax
system.
Objective: Strengthening revenue
administration by adopting a new
function based organizational
structure.
Outcome: Organizational
arrangements enable more effective
delivery of strategy and reforms.
Objective: Strengthen revenue
administration through effective risk
management.
Outcome: Compliance better managed
through effective risk management.
48
29
institutionalized and supported
by a governance framework in
line with TADAT dimensions.
New functional structure in
place and sufficiently staffed.
Risk based compliance
improvement strategy
institutionalized and supported
by a governance framework in
line with TADAT dimensions.
modernization linked to the
introduction of a compliance
improvement strategy.
Additional STX (1) mission will
further assist with
implementation.
The authorities recently
accepted PFTAC advice on
strengthening the current
organizational structure. LTX (1)
and STX (2) missions will further
assist in implementation.
Vanuatu recently introduced a
new compliance plan. LTX (1)
and STX (2) missions will further
assist in reviewing and
facilitating successful
implementation.
2.2 Strengthen core tax administration functions (taxpayer base, taxpayer services, filing obligations, payment obligations, and audit and other verification programs).
Cook
Islands
2
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
58
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
A review of core tax functions to
be carried out. LTX (2) mission
and STX (2) mission will provide
recommendations.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20151
Activity/Mission Description Person Days
Relevant Milestone Comments
Fiji
Kiribati
Republic
of the
Marshall
Islands
3
2
2
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
77
58
48
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Fiji underwent a TADAT which
identified weaknesses that are
currently being addressed. LTX
(2) and STX (3) missions will
further assist in introducing
TADAT dimensions.
LTX (2) and STX (2) missions will
assist in raising efficiencies
across core tax functions. PFTAC
TA provided in FY 2016 but
further strengthening required.
An environmental scan
completed which shows
potential for improving
operations. LTX (1) and STX (2)
missions will assist in raising
efficiencies across core tax
functions.
Federated
States of
Micronesia
Nauru
2
2
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
58
39
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Improvements achieved during
FY 2016 but further TA required.
LTX (2) and STX (2) missions will
assist in raising efficiencies
across core tax functions.
New laws need to be supported
by building capacity around core
tax functions. LTX (2) and STX (1)
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20151
Activity/Mission Description Person Days
Relevant Milestone Comments
Palau
Samoa
Tonga
Tuvalu
Vanuatu
2
3
3
3
3
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
Objective: Strengthen core tax
48
58
48
38
58
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
high efficiency levels in line
with TADAT dimensions.
Core tax functions operating at
missions will support this
process.
A process of restructuring
functions has commenced with
more TA needed to support
implementation. LTX (1) and STX
(2) missions will provide further
assistance.
LTX (2) and STX (2) missions will
assist in raising efficiencies
across core tax functions and
support the recently launched
compliance improvement plan.
LTX (1) and STX (2) missions will
assist in raising efficiencies
across core tax functions and
support the implementation of a
compliance improvement
strategy.
STX (2) missions will assist in
raising efficiencies across core
tax functions.
LTX (2) and STX (2) missions will
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20151
Activity/Mission Description Person Days
Relevant Milestone Comments
administration functions.
Outcome: Revenue administration
operations are efficient and effective in
performing key tax functions and
achieving expected outcomes.
high efficiency levels in line
with TADAT dimensions.
assist in raising efficiencies
across core tax functions and
also support implementation of
the recently launched
compliance improvement
strategy.
2.3 Strengthen core customs administration functions
The Oceania Customs Organization, based in Fiji, remains the primary vehicle supporting PICs in the implementation of their customs reform programs. For member
countries who have combined tax and customs offices or which are revenue authorities, PFTAC will continue to support development of integrated corporate strategies and
risk based compliance improvement strategies.
2.4 Supporting PICs in development of modern tax policy, legislative frameworks and regulations.
Regional
3
Objective: Strengthen tax policy and legal frameworks. Outcome: Modern tax policy and legal frameworks adopted.
57
Modern tax policy frameworks and legislation adopted.
Most PICs have legal frameworks in place – provision made for updates and rewrites.
2.5 Regional Activities – Training
Regional
Objective: Regional Capacity Building through the Pacific Islands Tax Administration Association Outcome: Knowledgeable tax administration
20
Well trained staff.
Training initiatives covering compliance and core tax functions.
PFTAC Annual Report 2016
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Financial Sector Supervision Logical Framework FY2017
Objective: Increased resolution and minimization of the risk factors identified in the financial system.
Measurable Outcome
Country Progress against Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
3.1 Development and Implementation of Prudential Returns
Cook Is.
Palau
Solomon Is.
Tonga
Vanuatu
5 None Commercial Banks are
submitting returns.
Central Banks are
producing reports.
Implemented, no more activities
3.2 Implementation of Financial Sector Information System (FSIS)
None None No more activities
3.3 Strengthened Off-site Supervision
1 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Marshall Is. 1 On-site examination preparedness
Develop banking expertise.
15
Supervisors have acquired
sufficient knowledge to
adequately perform the
on-site examination of a
commercial bank.
The examination team lacks
banking working experience.
STX Phase four period
Timor-Leste 2 On-site examination preparedness
Develop banking expertise.
15
Supervisors have acquired
sufficient knowledge to
adequately perform the
on-site examination of a
commercial bank.
The examination team lacks
banking working experience.
STX Phase four period
3.4 Strengthened On-site Examination
Cook Is. 3 On-site examination of a commercial
Bank
18 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. LTX phase four period
FSM 2 On-site examination of a commercial
Bank
18 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. STX phase four period
Samoa 3 On-site examination of a Public Financial
Institution
18 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. STX phase four period
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Solomon Is. 2 On-site examination of a commercial
Bank
18 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. LTX phase four period
Timor-Leste 2 On-site examination of a commercial
Bank
18 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. LTX phase four period
Tonga 3 On-site examination of a Public Financial
institution
15 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. LTX phase four period
Palau 3 On-site examination of a commercial
Bank
15 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. STX Phase five period
Tuvalu 1 On-site examination of a commercial
Bank
7 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
a topic relevant to the
examination. LTX phase four period
Vanuatu 2 On-site examination of a commercial
Bank
15 Examination report issued Will provide TA in the execution of
an on-site examination, including
the delivery of a 3 day workshop on
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
a topic relevant to the
examination. LTX phase five period
Regional (1) Workshop on Basel Core Principles on
Banking Supervision Questionnaire
4 Countries will complete
the Questionnaire
MCM will introduce and lead the
workshop at the AFSPC annual
meeting. LTX Phase four period
3.5 Development of Standardized Examination Reports
Cook Is. 3 On-site examination of a commercial
Bank
3 Draft examination report
completed
Concurrent with section 3.4
FSM. 2 On-site examination of a commercial
Bank
3 Draft examination report
completed
Concurrent with section 3.4
Samoa 3 On-site examination of a Public Financial
Institution
3 Draft examination report
completed
Concurrent with section 3.4
Solomon Is. 2 On-site examination of a commercial
Bank
3 Draft examination report
completed
Concurrent with section 3.4
Tonga 3 On-site examination of a Public Financial
Institution
3 Draft examination report
completed
Concurrent with section 3.4
Palau 3 On-site examination of a commercial
Bank
3 Draft examination report
completed
Concurrent with section 3.4
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Tuvalu
Vanuatu
1
2
On-site examination of a commercial
Bank
On-site examination of a commercial
bank
3
3
Draft examination report
completed
Draft examination report
completed
Concurrent with section 3.4
Concurrent with section 3.4
3.8 Modernized Legal Framework (Support from the IMF Legal Department)
Samoa 3 Revise existing Financial Institution Act 15 Draft Financial Institution
Act completed
Support from the IMF Legal Depart.
LEG Phase four period
3.9 Non-banks, Credit unions, and Microfinance institutions have Strengthened Legal, Supervisory and Operational Frameworks
Fiji 3 Capacity Building Supervisory Oversight
and sector financial reporting
10 Oversight of Credit
Unions with Reserve Bank
and financial reporting in
place and analyzed by the
Supervisor.
Will provide TA in developing and
implementing standard financial
reporting and provide training on
how to perform the oversight of
the sector. LTX Phase four period
Samoa 2 Capacity Building Supervisory Oversight
and sector financial reporting
10 Oversight of Credit
Unions with Reserve Bank
and financial reporting in
place and analyzed by the
Supervisor.
Will provide TA in developing and
implementing standard financial
reporting and provide training on
how to perform the oversight of
the sector. LTX Phase four period
Timor-Leste 2 Capacity Building Supervisory Oversight
and sector financial reporting
10 Oversight of Credit
Unions with Central Bank
and financial reporting in
place and analyzed by the
Supervisor
Will provide TA in developing and
implementing standard financial
reporting and provide training on
how to perform the oversight of
the sector. LTX Phase four period
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Vanuatu 2 Capacity Building Supervisory Oversight
and sector financial reporting
10 Oversight of Credit
Unions with Central Bank
and financial reporting in
place and analyzed by the
Supervisor.
Will provide TA in developing and
implementing standard financial
reporting and provide training on
how to perform the oversight of
the sector. LTX Phase four period
3.10 Effective Outreach on Financial Sector Issues
Regional (1) Association Financial Supervisors of
Pacific Country AFSPC. Secretariat
function
5 Annual Meeting
Host; Financial
Commission Palau
June 2016
Will provide a review of activities
and his plan for the upcoming year.
Members will provide an overview
of their country’s supervision
program. LTX Phase four period
Regional (2) Credit Unions Pacific Congress
Workshop instructor and facilitator
5 Deliver workshops to
delegates on topic
relevant to the credit
union sector.
Topics relevant to the Pacific
region. LTX Phase five period
Regional (3) Annual Governors' meeting
Dec 2016 – Central Bank Timor-Leste
5 Outline PFTAC's Financial
Sector advisory activates
and results for the year.
Presentation will include
achievements for the year and
forecast for the upcoming year.
LTX Phase five period
Regional (4) PFTAC Annual Steering Committee
Meeting
5 Provide an overview of
results and outline future
programs.
Annual review and presentation of
activities. LTX Phase four period
Regional (5) Regional Partners' Meeting 3 Financial sector Meeting
to discuss regional issues
Host: TBD
LTX Phase four period
PFTAC Annual Report 2016
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Macroeconomic Statistics Logical Framework FY2017
Objective: More timely and reliable economic statistics
Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
4.1 : At least 8 countries compile at least two independent measures of GDP
Fiji
2 National accounts: strengthening
methodologies for the expenditure
measure of GDP.
5 Work on second measure
nearly complete.
Base measures from 2011
supply-use table.
Kiribati 2 National accounts: strengthening
methodologies for the compilation of GDP
estimates by production and developing an
expenditure measure of GDP.
20 Work started on second
measure.
Adequate resources required
for second measure. (STX
possible)
Samoa
2 National accounts: strengthening
methodologies for the expenditure
measure of GDP.
14 Work on second measure
nearly complete.
4.2 : Constant price of GDP estimates are rebased at least every 10 years
Cook Islands 2 National Accounts Rebase and
Methodology Improvements
32
Surveys and other data sources
available for rebase
LTX but possibly an STX for
continuity.
Solomon
Islands
2 National accounts: TA with the rebasing
estimates in constant prices
28 GDP estimates in constant
prices rebased.
2 LTX missions.
1 Ratings defined as follows: 1= Very limited progress towards objective; 2= Some progress towards objective; 3= Substantial progress towards objective; 4= Objective largely or fully achieved.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Vanuatu 3 National accounts rebase 24 Data analyzed, worksheets
being updated.
2 missions. Postponed from FY
2016.
4.4 : At least 4 countries compile quarterly national accounts
Fiji 3 QNA methodology training 10 Some countries producing QNA
but not 4.
First published FY2016.
4.5 : Data sources are adequate and methodologies are sound
FSM 2 National Accounts training and
methodology improvements. Combined
with training course.
14 National accounts produced
but with major deficiencies
TA Supplemented by sub-
regional workshops
Niue 2 National accounts methodology review and
update. BOP Update.
16 Adequate national accounts
produced but with some
deficiencies
Major national accounts update
in FY 16.
Nauru 2 National Accounts: compilation of 2014-15
GDP estimates by production and
methodology improvements.
10 GDP estimates published. .
Palau 2 National Accounts: TA mission combined
with training course
14 Metadata available but not
published.
Papua New
Guinea
2 National accounts: strengthening
methodologies and assist with the
compilation of GDP estimates in current
prices. Assist with rebasing GDP estimates
in constant prices. Assist with the NSO
reform process.
48 GDP estimates published. The
NSO has resumed regular
compilation and publication of
GDP estimates. Rebased GDP
estimates in constant prices
compiled.
3 missions scheduled but
dependent on proven demand.
PFTAC provides TA in
collaboration with the
Australian Bureau of Statistics.
RMI 2 National Accounts training and
methodology improvements.
5 National accounts produced
but with major deficiencies
TA Supplemented by sub-
regional workshops
PFTAC Annual Report 2016
Page | 134
Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Solomon
Islands
2 National accounts: TA with the rebasing
estimates in constant prices
25 Base year less than 10 years
old, plans in place to keep it
thus.
(See 4.2)
Tokelau 2 GDP Estimate 2 GDP measure produced for
HIES year.
HIES results available in 2017.
Combine with mission to
Samoa.
Tonga 3 National Accounts: strengthening annual
methodology and review of 2015-16 annual
GDP estimates.
8 Good quality GDP estimates
published regularly.
Tuvalu 2 National Accounts update, review, training. 8 National accounts produced
but with major deficiencies
Can be done in-country or at
PFTAC office.
Regional 2 National accounts training course for
compilers from PNG, Solomon Islands,
Vanuatu focused on methodologies for
rebasing national accounts in constant
prices and on the incorporation of
household survey data in national
accounts.
20 Sound methods in place. A follow-up to initial course
held in 2015.
Regional Participation in the PSSC which coordinates
TA in statistics in the region.
12 TA coordination improved.
Phase II of the Ten Year Pacific
Statistics Strategy
implemented.
2 meetings. Coordination with
SPC, ABS important.
Regional - National accounts training course 10 Sound methods in place. Both LTX involved and possibly
staff from HQ combined with
review mission.
Regional - HIES work Group meeting 10 Both LTX involved.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Person Days
Relevant Milestone Comments
Regional - Annual headquarters RTAC Advisors
meeting.
18 Both LTX attend.
Regional Participation in the PFTAC Steering
Committee meeting.
8 Both LTX attend
4.6 : National accounts statistics are consistent with other statistics including balance of payments and government finance statistics
Cook Islands 2 Annual Government Finance Statistics (GFS)
reconcile with quarterly.
40 2 missions. STX. Continuation of
JSA project work. LTX after
November.
Fiji 2 GFS: Budget – GFSM 2014 General govt. 40 2 missions. Continuation of JSA.
LTX after November.
Solomon
Islands
2 GFS: Assist Central bank with compilation
of General Government.
20 STX. Continuation of JSA project
work.
Vanuatu 2 GFS: Compilation of General Government. 40 2 missions. Continuation of JSA
project. LTX after November.
4.8 : Price statistics are of good quality and base years up to date
ABS and SPC providing
assistance in prices.
4.9 : Improvement in the coverage, quality and timeliness of balance of payments estimates
Cook Islands 1 Current Account maintenance and further
development of BOP.
40 Balance of payments up to
current account, published
regularly.
STX – two missions.
Nauru 2 Balance of Payments Statistics:
compilation of 2015-16 estimates and
international investment position.
20 Balance of payments statistics
published.
STX mission. Two if needed.
PFTAC Annual Report 2016
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Macroeconomic Analysis Logical Framework FY2017
Objective: Improved macroeconomic analysis
Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
5.1 Integrated macroeconomic monitoring / projection processes (Phase IV program); Enhanced monitoring, forecasting and policy analysis tools (Phase V program)
Fiji 3 Develop a macroeconomic and fiscal framework with the Ministry of Finance.
LTX 0 A consistent macroeconomic and fiscal framework is used to produce revenue and expenditure forecasts.
3 Support and advise on econometric estimations and empirical analysis.
LTX 0 A range of statistical and econometric tools are used in empirical analysis.
Policy advice is empirical based.
3 Support and advise on quantifying tax expenditures.
LTX 0 A tax expenditures report is produced.
Kiribati 2 Develop a macroeconomic and fiscal framework.
STX 18 A consistent macroeconomic and fiscal framework is used in budget preparations and analysis.
PNG 3 Continue developing a macroeconomic and fiscal framework.
LTX 16 A consistent framework is used to support monitoring
The development of a macroeconomic and fiscal
1 Ratings defined as follows: 1 = Very limited progress towards objective; 2 = Some progress towards objective; 3 = Substantial progress towards objective; 4 = Objective
largely or fully achieved.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
and projection activities. framework requires resources and support from management.
3 Review and enhance methodology for constructing a trimmed mean measure of consumer price inflation.
STX 10 An unbiased trimmed mean measure of inflation is constructed.
Samoa 3 Facilitate a cross institution (Ministry of Finance, Ministry for Revenue, Central Bank of Samoa, Samoa Bureau of Statistics) workshop on forecasting and sharing data.
LTX 7 An action plan for improving forecasting and data sharing is agreed and implemented.
Solomon Islands
2 Facilitate a cross institution workshop (Ministry of Finance and Treasury, Central Bank of Solomon Islands, Solomon Islands National Statistics Office) on forecasting and sharing data.
LTX 7 An action plan for improving forecasting and data sharing is agreed and implemented.
3 Enhance revenue and expenditure forecasting methodologies.
LTX 7 Forecasts are consistent.
Support the use of the FP framework in preparations for the IMF Article IV.
LTX 7 The FP framework is used to for empirical analysis.
Tonga 3 Continue developing the Ministry of Revenue and Customs revenue forecasting tool.
LTX 7 Discrepancies between tax collection estimates and actual collections are reduced.
Vanuatu 3 Support the use of the FP framework in preparations for the IMF Article IV.
LTX 7 The FP framework is used to inform IMF Article IV consultations.
3 Assist with budget preparations. LTX 7 The national framework for revenue forecasting is used.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
Regional Workshop on using financial programming frameworks for policy analysis
LTX 6
STX 14
Collaboration between central banks and ministries of finance is strengthened in the development of policy tools.
Capacity is increased to undertake empirical based policy analysis.
Peer learning takes place and professional networks are formed in the region.
Fiji, PNG, Samoa, Solomon Islands, Tonga, Vanuatu
2 Review of countries’ financial system. LTX 36 An inventory of financial institutions operating in countries is compiled.
The technical assistance would only be undertaken with the addition of a second macroeconomic advisor.
5.2 Multi-year fiscal planning frameworks (Phase IV program); Strengthened capacity to develop sustainable policies (Phase V program)
Cook Islands 4 Continue developing the macroeconomic and fiscal framework including the incorporation of population projections and improved government finance statistics.
LTX 9 The fiscal risks of demographic changes are assessed.
Historical government finance statistics are available.
Samoa 4 Incorporate population projections into the SERF model.
LTX 3.5 The impacts of continued population growth are analyzed.
FSM, Palau, RMI
3 Sub-regional workshop on incorporating demographic changes into budget processes.
LTX 9 Fiscal provisions are made for demographic changes.
The workshop is organized in collaboration with PFTAC’s PFM Advisor.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
3 Sub-regional workshop on developing tax revenue forecasting methodology.
LTX 9 Tax revenue forecasts are produced based on economic projections.
The workshop is organized in collaboration with PFTAC’s Revenue Policy and Administration Advisor.
Regional 3 Workshop on incorporating demographic changes into budget processes.
LTX 6
STX 14
Fiscal provisions are made for demographic changes.
The workshop is organized in collaboration with PFTAC’s PFM Advisor.
3 Workshop on developing tax revenue forecasting methodology.
LTX 6 A range of tools and sources of information are used to produce tax forecasts.
The workshop is organized in collaboration with PFTAC’s Revenue Policy and Administration Advisor.
3 Workshop on forecasting economic activity in the tourism sector.
LTX 6
STX 14
Forecasts for the tourism sector are based on indicator variables.
GDP forecast errors are reduced.
Fiji, PNG, Samoa, Solomon Islands, Tonga, Vanuatu
2 Review of countries’ financial sector policies.
LTX 7
STX 36
An inventory of countries’ financial sector policies is compiled.
The technical assistance would only be undertaken with the addition of a second macroeconomic advisor.
Regional 2 Workshop on financial developmentfinancial inclusion and economic growth.
LTX 6
STX 10
Financial development is included into development plans.
The workshop would only be organized with the addition of a second macroeconomic advisor.
5.3 Ability to assess debt sustainability (Phase IV program); Strengthened capacity to build greater resilience to shocks (Phase V program)
Fiji 3 Use the macroeconomic and fiscal framework to undertake debt
LTX 10 The sustainability of policy scenarios is evaluated.
Required public debt data need to be compiled.
PFTAC Annual Report 2016
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Measurable Outcome
Country Progress against
Milestones at end-FY20161
Activity/Mission Description Mission
Days Relevant Milestone Comments
sustainability scenarios.
Samoa 3 Extend the forecast horizon of the SERF model for debt sustainability analysis.
LTX 3.5 The sustainability of policy scenarios is evaluated.
3 Develop a debt analysis tool. STX 11 Better provision for debt servicing payments and management of exchange rate risks reduce fiscal volatility.
Required public debt data need to be compiled.
Solomon Islands
3 Develop the fiscal sector of the Solomon Islands FP framework to undertake debt sustainability scenarios.
LTX 7 The sustainability of policy scenarios is evaluated.
Required public debt data need to be compiled.
Solomon Islands, Tonga
3 Develop a debt analysis tool. STX 22 Better provision for debt servicing payments and management of exchange rate risks reduce fiscal volatility.
Required public debt data need to be compiled.
Regional 2 Workshop on financial stability and natural disasters.
LTX 6
STX 10
Emergency management plans include natural disasters.
The workshop would only be organized with the addition of a second macroeconomic advisor.
5.4 Incorporation of disaster risks into the fiscal planning process (Phase IV program)
Disaster risk scenarios will be incorporated into debt sustainability analysis.